KUALA LUMPUR (Nov 7): IHH Healthcare Bhd (KL:IHH), via its subsidiary Pantai Holdings Sdn Bhd, has successfully issued its maiden RM4 billion sukuk under its newly established RM15 billion sukuk wakalah programmes, the proceeds of which will go towards funding its acquisition of the 600-bed Island Hospital in Penang, which it announced in September.

The sukuk issuance, one of Malaysia’s largest unrated sukuk offerings this year, drew “tremendous support”, OCBC said in a statement, as it achieved a subscription rate exceeding four times the issuance size.

OCBC Al-Amin Bank Bhd is the sole principal adviser, lead arranger, sustainability structuring adviser, shariah adviser, facility agent and lead arranger for the sukuk programme.

The sukuk issuance’s joint lead managers are CIMB Investment Bank Bhd, HSBC Amanah Malaysia Bhd, Maybank Investment Bank Bhd, OCBC, RHB Investment Bank Bhd, and United Overseas Bank (Malaysia) Bhd.

“Island Hospital is a highly attractive asset with strong operations in Penang, a fast-growing market, and supported by a large specialist pool and clinical offerings with strong operational metrics. This acquisition creates a medical tourism powerhouse to support the country’s aspirations, as Island Hospital is the leading medical tourism hospital in Malaysia. The acquisition also demonstrates continued investment in IHH Healthcare’s home market with strong growth, leveraging on Pantai’s proven operating track record and successful M&As (mergers & acquisitions),” said IHH group chief executive officer Dr Prem Kumar Nair.

The transaction was financed through the group’s first ever issuance of RM4 billion unrated sukuk at optimal pricing, noted IHH group chief financial officer Dilip Kadambi. “The issuance was well supported by local and foreign banks, and structured through multiple tenors and tranches which allow IHH Healthcare to maximise its cash flows and liquidity deployment from a debt servicing perspective,” Dilip added.

IHH, controlled by Malaysia’s sovereign wealth fund Khazanah Nasional Bhd, operates in 10 countries, with Malaysia, Singapore, Türkiye, India and China as key markets. With the addition of Island Hospital, IHH now owns 18 hospitals in Malaysia, including three in Penang, besides Gleneagles Hospital and Pantai Hospital.

“OCBC is honoured to play a pivotal role as the sole principal adviser and lead arranger for Pantai’s maiden sukuk programmes. Our significant role in this landmark transaction clearly demonstrates our strategic client relationship in supporting IHH Healthcare from the inception to becoming one of the largest private healthcare providers in the world.

"OCBC is also an existing sole financier to Island Hospital, supporting them through the entire development journey to becoming a formidable healthcare provider in Penang. This demonstrates OCBC’s strong coverage and expertise in the healthcare sector, and our continued pioneering effort in facilitating cost effective sustainable financing solution in supporting our valued clients like IHH Healthcare in their growth journey,” said OCBC managing director cum senior banker and head of investment banking Tan Ai Chin.

IHH’s shares slipped one sen to close at RM7.25 on Thursday, valuing the company at RM63.88 billion.