KUALA LUMPUR (Sept 15): Sime Darby Bhd said there is no final decision yet on whether the group will revive plans to list its healthcare unit on the Bursa Main Market.
The diversified group will continue to explore all options, including an IPO for its 50%-owned subsidiary Ramsay Sime Darby Health Care Sdn Bhd (RSDH), after talks with IHH Healthcare Bhd to buy 100% of RSDH from its owners were terminated.
“All options are on the table, but there are no conclusive decisions at this juncture,” Sime Darby’s spokesperson told theedgemarkets.com when asked whether the group will reconsider the listing of RSDH.
It was reported that the planned IPO was put on hold as the group was looking at various options to expand its healthcare business.
IHH proposed to acquire 100% of RSDH in March this year at an enterprise value of RM5.67 billion on a cash-free and debt-free basis. Five months later, the discussion for the acquisition was terminated and this caused investors to anticipate the revival of Sime Darby's plan to list its healthcare division.
“The offer by IHH Healthcare was an interesting one, hence we went through the discussion process, and obviously for any deals of this nature, there is always a possibility that it may not go through.
“Hence, as far as we are concerned, there is inherent strong potential in our healthcare business, and we will continue to pursue opportunities to strengthen the business,” the spokesperson explained, in response to theedgemarkets.com’s queries on Thursday.
The Sime Darby spokesperson also said that the group is in no hurry to sell RSDH, as the hospitals under RSDH would continue to provide value for the group.
“We continue to believe in the inherent value of our award-winning hospitals and the growth prospects of the healthcare sector, which are underpinned by the growing affluence in the region. The reopening of the economy has certainly improved business, while the reopening of borders has brightened prospects for medical tourism,” the spokesperson said.
Local research firm RHB Research said in a Sept 12 note that Sime Darby could have raised RM2.6 billion from the sale of RSDH, which could have been used to pay a special dividend and reinvest in its core automotive and industrial businesses through the acquisition of adjacent and complementary assets.
However, the loss of the potential special dividend from the sale of RSDH was a disappointment, said RHB.
The Sime Darby spokesperson said: ”Sime Darby as a company has consistently paid out more than 70% of our net profits as dividends, even during the toughest of times. We are confident that we will be able to continue to provide value to our shareholders. Sime Darby has a strong balance sheet in terms of cash and debt headroom.”
At Thursday’s market close, Sime Darby shares slipped one sen or 0.45% to RM2.20 with some 16.92 million shares changing hands. At RM2.20, Sime Darby has a market capitalisation of RM14.98 billion.