PETALING JAYA: Conglomerate Sime Darby Bhd is finally exiting the private hospital business via the RM5.68 billion sale of its joint-venture Ramsay Sime Darby Health Care Sdn Bhd (RSDHC) after Columbia Asia group made an offer it “could not refuse”.
Sime Darby will pocket RM2.84 billion as it holds a 50% interest in RSDHC, while the balance is held by Australia-based Ramsay Health Care Ltd. The JV operates four hospitals in Malaysia and three in Indonesia.
Sime Darby will make a gain of RM2 billion on the disposal of its holdings in RSDHC, it said in a stock exchange filing today.
The filing said the group’s wholly owned unit Sime Darby Holdings Bhd and Ramsay’s subsidiary AH Holdings Health Care Pty Ltd have inked an agreement with Columbia Asia for the disposal of their 100% equity interest in RSDHC.
The group entered the healthcare business nearly four decades ago following the acquisition of Subang Jaya Medical Centre in Selangor from United Estates Projects Bhd in 1985. In 2013, Sime Darby and Ramsay set up a joint venture to create RSDHC.
An offer too good
Sime Darby group CEO Jeffri Salim Davidson said while the hospital business is a great asset, the group has always maintained its focus on its core trading businesses of motors and industrial.
“The offer from Columbia Asia was one we could not refuse,” he revealed in a statement today.
Sime Darby expects the deal to be completed in the third quarter of next year (Q3 FY2024), subject to approvals from the relevant regulatory authorities.
“The proceeds from the proposed disposal will enable Sime Darby and its subsidiaries to further strengthen its core businesses of motor and industrial by paring down its borrowings arising from the acquisition of UMW Holdings Bhd,” Sime Darby said.
Apart from lowering its gearing and providing further balance sheet headroom to the group, the proceeds will also help fund the cash outlay for the mandatory general offer of the UMW acquisition, it added.
Sime Darby had previously disclosed on June 28, 2023, its intention to sell its stake in RSDHC in conjunction with Ramsay.
Subsequently, a competitive bidding process was conducted, with various potential buyers, including Columbia Asia, participating in the recently concluded proceedings.
Malaysia-based Columbia Asia is an international private healthcare company that is a wholly-owned subsidiary of Columbia Asia Healthcare Pte Ltd based in Singapore, which is 99.9% owned by HLT Healthcare Holdings Ltd.
HLT is in turn is jointly owned by Malaysian conglomerate the Hong Leong Group, and One Health Holdings, which is owned and controlled by TPG-managed funds.
The private healthcare group and its subsidiaries have 22 medical facilities across Asia with 14 of them in Malaysia.
Columbia Asia director Tunku Ali Redhauddin Tuanku Muhriz said RSDHC has a “unique platform of hospitals in Malaysia and Indonesia” and would greatly complement Columbia Asia.
Sime Darby closed 4 sen or 1.68% lower at RM2.34, giving it a market capitalisation of RM15.95 billion.