SINGAPORE/KUALA LUMPUR — Malaysia’s diversified group Sunway Bhd plans to raise up to $300 million to support expansion of its health care business, according to sources familiar with the matter.
Sunway will issue around 20% to 25% fresh shares in its health care business as part of the fundraising, the sources said. Potential investors include private equity companies, as the holding company is open to only minority investments.
The fundraiser is said to be in the early stage, and Maybank Kim Eng has been appointed as the sell-side adviser, three sources told DealStreetAsia.
“Sunway plans to use the funds to expand its hospital chain in Malaysia to increase capacity to 2,500 beds by 2025,” sources said. Sunway, with business interests that include property, construction and health care, has 741 licensed beds, according to its 2019 annual report.
The fundraising may be a precursor to a float, as the health care division is expected to be listed on Bursa Malaysia in about three years, a source said.
When contacted by DealStreetAsia, Sunway said in a statement that the group “has always been active in exploring and evaluating various options for its businesses with a view to enhancing shareholders’ value.”
The group added: “To this end, we continue to have discussions with various parties on potential opportunities involving the businesses and affairs of the group and its subsidiaries. However, as of now, no decision has been made by the group to pursue any particular opportunity. We will make the necessary announcements as and when required.”
In 2017, it was reported that Sunway founder and chairman Tan Sri Jeffrey Cheah said the group plans to list its health care unit in five years. Sunway was said to have conducted a fundraising plan for its health care business to raise around $100 million in 2016, according to two sources.
The plan was not successful as its health care business was deemed insubstantial at the time. Sources now say Sunway’s health care business is more attractive to investors as it has grown bigger. Sunway’s hospital chain could emerge as the third-largest private hospital player in Malaysia, after Khazanah-backed sovereign wealth fund IHH Healthcare and KPJ Healthcare.
Sunway established its flagship hospital Sunway Medical Centre in 1999. The division provides 741 licensed hospital beds, 226 consultation suites and 17 operating theaters, its annual report showed.