KUALA LUMPUR (Sept 15): Australia's Ramsay Health Care Ltd said a sale process was commenced, which resulted in the receipt of a number of non-binding indicative offers for Ramsay Sime Darby Health Care Sdn Bhd, its joint venture (JV) with Sime Darby Bhd. A select number of parties are now in a due diligence process expected to conclude towards the end of October.
The group, which is one of Asia’s largest private healthcare operators with a market capitalisation of almost RM52 billion, told the Australian Securities Exchange Ltd (ASX) on Friday that if a sale proceeds, the funds received will be used to pay down drawn debt.
“Ramsay aims to lower the funding group’s leverage ratio to below 2.5 times as at June 2024, from the proceeds of the potential sale of Ramsay Sime Darby and increased earnings,” it said.
Ramsay’s filing confirmed a report earlier this week by The Edge Malaysia weekly, which in its latest edition said that the plan by Sime Darby and Ramsay to sell off their equally controlled JV was understood to have generated interest among major healthcare players in Asia.
Citing sources, the weekly said they include Columbia Asia, Sunway Healthcare Holdings Sdn Bhd, Bangkok Dusit Medical Services PCL, Bumrungrad Hospital PCL, and possibly even Apollo Global Management Inc and an Indonesian player.
In an email response to The Edge, Sime Darby, with 50% equity interest in Ramsay Sime Darby, said: “Sime Darby, with our partner Ramsay Health Care, is currently exploring the sale of our 50:50 JV Ramsay Sime Darby Health Care. There has been significant interest from various industry players, and the assessment process is ongoing. Hence, it would be premature to elaborate on any specific details at this juncture.
“The group, as a listed entity on Bursa Malaysia, is committed to its continuous disclosure obligations, and will keep the market informed as and when appropriate should there be any pertinent developments to be announced on this matter,” the diversified conglomerate said.
Meanwhile, Ramsay told the ASX that credit rating agency Fitch had downgraded the investment grade credit rating it ascribed to Ramsay’s Funding Group 1 from BBB/Negative to BBB-/Stable.
In a filing with the ASX on Friday, the group said the change in the rating is not expected to impact its ability to access funding and liquidity in the future.
It said the financial impact of the change in the rating of the company’s US$1.5 billion (RM7.02 billion) sustainability-linked loan is a 10-basis-point increase in interest costs.