The purchase includes a parcel of freehold land together with a five-storey private hospital with 384 carparks – formally known as Pantai Hospital Manjung – in Manjung, Perak for RM63mil and is expected to be completed within three months. PMCSB has been leasing the land and property from KSB since 2014. The acquisition is expected to result in cost savings for IHH in the long run. It will also enable IHH to benefit from the appreciation of the property.KSB is currently still the registered owner of the land and property despite having sold the property to YNHSB back in March 2015.This is due to the mutual agreement between the two parties which results in KSB being the registered owner of the property while YNHSB is the beneficial owner of the property,” it said.As at Dec 31, 2015, the net book value of the property is RM51.17mil. As such, IHH is planning to purchase it at a premium of +23.5%.MIDF Research noted that however, the potential future savings in operations and future bed expansions will more than outweigh the premium paid.IHH’s cash position as of 3Q16 amounts to RM2.1bil which is more than enough to fund the entire acquisition without external borrowings.IHH will most likely fund the acquisition via internally generated funds to make way for bigger acquisitions locally or abroad that will require heavy external borrowings.

Source: The Star January 27, 2017 01:34 UTC