This article first appeared in The Edge Financial Daily on November 13, 2018 - November 19, 2018

KUALA LUMPUR: TMC Life Sciences Bhd said its parent, Singapore-listed Thomson Medical Group Ltd (TMG), plans to spin off its real estate business to its existing shareholders via a distribution in specie by way of a capital reduction of S$155.97 million (RM467.41 million) at between S$0.35 and S$0.60 per share.

TMG chairman Ng Ser Miang said the move will enable the group to attract investors preferring a pure healthcare company, leading to a wider investor base and improved liquidity for its shares.

“This move is in line with our current focus on developing and growing our healthcare business as well as our plans to divest the real estate business. It will lead to us becoming a pure healthcare company and allow management to focus on capturing growing demand for quality healthcare in this region,” he added in a statement yesterday.

The group’s real estate business, comprising the design and engineering as well as hospitality businesses, is currently held by RSP Holdings Pte Ltd (RSPH).

Under the plan, TMG will spin off all its shares in real estate business units — RSP Architects, Rowsley Hospitality Holdings Pte Ltd, Rowsley (SM) Pte Ltd and GG Collections — to RSPH for an aggregate consideration of S$87.3 million. In exchange, RSPH will assume repayment obligations of S$69.42 million owed to TMG.

The distribution in specie of RSPH shares will be on the basis of one RSPH share for every one TMG share. Upon completion of the proposed distribution, TMG would cease to hold any shares in RSPH, and RSPH would consequently cease to be a subsidiary of the group.

In conjunction with the proposed distribution, an exit alternative in the form of cash will be provided to minority shareholders not wishing to hold RSPH shares after the proposed distribution.

In Malaysia, TMG owns the Thomson Hospital Kota Damansara. Additionally, the group offers specialised fertility services through the TMC Fertility Centre situated within Thomson Hospital Kota Damansara, with five other branches across Malaysia.

The group recently started works to expand the number of beds at Thomson Hospital Kota Damansara and has also announced plans to construct the Thomson Iskandar Medical Hub in Johor Baru.

The group also owns a piece of land in Johor Baru contiguous to the Thomson Iskandar Medical Hub, which it intends to develop into an integrated healthcare and wellness destination known as Vantage Bay Healthcare City. TMG owns a 70.35% stake in TMC Life Sciences.