KUALA LUMPUR (Aug 29): Sunway Bhd (KL:SUNWAY) on Friday announced much-awaited plans to list its healthcare unit by early 2026.
Before the proposed listing of up to 1.97 billion new and existing shares, the group said Sunway Healthcare Holdings Bhd (SHH) will do a share split, turning every one share into nine shares, increasing the total shares from 1.2 billion to 10.9 billion without changing the company’s total value of RM2.2 billion.
SHH is a direct 84%-owned joint-venture company of Sunway City Sdn Bhd (SunCity), which in turn is a wholly owned unit of Sunway. The remaining 16% stake in SHH is held by Singapore-based Greenwood Capital Pte Ltd.
After the split, SunCity will give these shares to Sunway as a special dividend. Sunway is proposing to then pass them on to its shareholders, giving one SHH share for every 10 Sunway shares they own.
The IPO, which will require regulatory approval, will involve up to 1.97 billion new and existing shares, with 575 million new shares offered to the public and up to 1.4 billion existing shares for sale, according to a bourse filing on Friday. The listing will offer investors up to a 17.2% stake in SHH, which operates five hospitals. Maybank Investment Bank and AmInvestment Bank are the joint advisers for the IPO.
Sunway said it will use the proceeds from its portion of the offer for sale to pare down borrowings, fund working capital, and cover listing-related expenses. Meanwhile, SHH’s share of proceeds from the public issue will be channelled into expanding existing hospitals, building a new hospital, redeeming part of its Islamic medium-term notes, and defraying IPO expenses.
The proposed listing requires regulatory and shareholders’ approval. Sunway said it is also looking to get Bursa Malaysia’s approval for a lower minimum public shareholding spread of at least 20%.
“The proposed listing will enable Sunway to unlock the value of its investment,” the conglomerate said. “Sunway, via SunCity, will retain a substantial equity interest of 69.5% in SHH, allowing it to continue benefiting from SHH’s growth and performance.”
The exercise will also provide SHH with direct access to capital markets, strengthen its financial flexibility, and enhance its visibility as a leading private healthcare provider in Southeast Asia, it added.
SHH operates five hospitals with a combined 1,662 licensed beds, led by its flagship Sunway Medical Centre in Subang Jaya, Selangor.
Its network also includes facilities in Cheras, Penang, Damansara and Ipoh, alongside ancillary businesses such as ambulatory care centres, fertility services, traditional and complementary medicine, home care, and senior living.
As part of its expansion, SHH plans new hospitals in Seremban, Iskandar Puteri and Putrajaya, as well as a fertility centre in Kota Bharu, which will raise its total bed capacity to over 3,400 by 2032.
For the financial year ended Dec 31, 2024 (FY2024), SHH posted a net profit of RM257.5 million on revenue of RM1.85 billion, up from RM181.6 million and RM1.46 billion respectively in FY2023. Adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) rose to RM458.5 million from RM380.8 million.
The listing plan confirms an earlier report by The Edge in January this year that Maybank Investment Bank and AmInvestment Bank were leading candidates to advise on SHH’s IPO.
The deal comes as Malaysia’s healthcare sector draws heightened attention amid rising medical costs, which have pushed up insurance premiums and prompted Bank Negara Malaysia to intervene by phasing out steep upward revisions.
Recent transactions in the sector include IHH Healthcare Bhd’s (KL:IHH) purchase of Island Hospital Sdn Bhd from Comprehensive Care Sdn Bhd. In 2023, Sime Darby Bhd (KL:SIME) and Australia’s Ramsay Health Care Ltd sold their 50:50 joint venture, Ramsay Sime Darby Health Care Sdn Bhd, to Columbia Asia Healthcare Sdn Bhd for RM5.7 billion cash.
Sunway’s share price settled down two sen or 0.40% at RM4.92 at Friday’s noon break, valuing the group at RM30.85 billion. Year to date, the stock is up 4.02%.