KUALA LUMPUR: IHH Healthcare Bhd aims to reduce foreign exchange (forex) exposure to between US$300 million and US$350 million (RM1.257 billion and RM1.466 billion), from US$420 million currently in Turkey, where it has a 90% stake in Acibadem.
IHH group CFO Low Soon Teck said the group also plans to refinance between US$125 million and US$187.5 million of its debt denominated in euro and US dollar into Turkish lira.
“For this exercise, we have to do it in stages or we’ll place ourselves out of the market. At the moment, we aim to reduce it to US$350 million to US$300 million by the end of the year,” he told reporters at its AGM today.
Last year, the group held debt denominated in euro and US dollar equivalent to US$670 million in its Turkish market, where the free-falling lira saw a 30% decline against the US dollar. The group subsequently managed to reduce the forex risk to US$420 million earlier in April.
Besides reducing the forex risk, the healthcare group will be expanding its presence in China.
Outgoing managing director and CEO Dr Tan See Leng said it has established three greenfield projects in China, namely Gleneagles Chengdu Hospital, Gleneagles Shanghai Hospital and Gleneagles’ day surgery and ambulatory centre.
“The expansion follows the hub-and-spoke strategy unveiled four years ago, in which each of the hospitals would be supported by a number of its medical centres; and with the completion of the greenfield projects, three of the four hub and spokes clusters that were identified in our strategy will be completed,” he said.
Gleneagles Chengdu Hospital will have a capacity of 350 beds with capital expenditure (capex) of RM420 million. It is due to be completed in the second half of the year along with the day surgery and ambulatory centre in Shanghai.
The capex for IHH’s 450-bed capacity Gleneagles Shanghai Hospital, which is scheduled to be completed in the second half of 2020, is RM513.8 million.
On the South Asian front, IHH is awaiting the Indian Supreme Court’s judgment on its bid to acquire controlling stake in Fortis Healthcare Ltd, in which it currently has a 31.1% stake.
According to Tan, the court will reconvene on July 2 and with the general election out of the way, it expects to receive a judgment in the third quarter of this year.
He said the group’s outlook in Fortis has been “rosy” so far as it has managed to achieve all the 100 days objectives for the Indian healthcare provider.
Fortis returned to the black for its fourth quarter (January-March) of its 2019 financial year, recording a net profit of 135.6 crores after accounting for exceptional items against a loss of 932 crores in the corresponding period in the previous year. The hospital’s earnings before interest, tax, depreciation and amortisation jumped 120%.
On Monday, the group announced that Tan would be stepping down as its managing director and CEO when his contract expires on Dec 31, 2019. Columbia Asia Group CEO Dr Kelvin Loh will return to IHH to take over Tan’s role.
Loh, who joined Columbia Asia Group in 2017, had previously held senior management roles in IHH between 2008 and 2017, and had served as CEO of the group’s Singapore operations division.
from Business http://bit.ly/2W9vHgo
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