Malaysia’s Khazanah eyes investment in Lanka Hospitals
Khazanah Nasional Berhad (Khazanah), the strategic investment fund of the Government of Malaysia has shown interest in buying majority shares in Lanka Hospitals Corporation PLC (LHCL), should the government decide to divest these shares, officials said. This follows their visit to Sri Lanka to hold discussions with key government officials early last month. “They ideally want the ownership in LHCL,” an official told the Business Times. He told the Business Times that Khazanah entrusted to hold and manage the commercial assets of the Malaysian Government and to undertake strategic investments on behalf of the nation will be looking to invest in other projects here as well.
In May, a 3-day visit of the 4-member team had deputy Chairman Khazanah, Tan Sri Dato Nor Mohamed Yakoop leading this delegation.
Khazanah is interested in a controlling stake or a part management part ownership at LHCL, according to the official. He said that the Ministry officials had made presentations on four State Owned Enterprises (SOEs) – Hilton, LHCL, SLIC and Sri Lankan Airlines during their meeting.
Khazanah, which has a 10 per cent stake of John Keells Holdings through Broga Hill Investment (Special Purpose Vehicle of Khazanah) is involved in sectors such as power, telecommunications, finance, healthcare, aviation, infrastructure, leisure and tourism, and property, amongst others.
Separately the Singapore Hospital chain has also shown interest in LHCL and the Singaporeans are due to come next month for further discussion, he added. He said that a powerful state minister is negotiating this deal. Singaporeans are due to come next month for further discussions, he added. Some local hospital operators – Hemas and Softlogic Group also expressed their interest in LHCL earlier. A Softlogic official told the Business Times that it’s a lucrative opportunity for the group which controls Asiri Hospital Holdings PLC (Asiri), Asiri Surgical and the Central Hospital and is the largest listed private hospital group in Sri Lanka in terms of revenue and profits.
Hemas in a recent announcement to the Colombo Stock Exchange (CSE) said that they noted the interest expressed by the Government in disposing of shares in ventures such as LHCL and in this context were interested in pursuing this opportunity once the government initiates the official process. LHCL, previously Apollo Hospitals Colombo, is now majority owned by the government with the state owned Sri Lanka Insurance Corporation holding a 54.61 per cent stake. LHCL currently operates with a bed capacity of 240 beds and is at around 90 per cent occupancy, but further increases in competitor capacity expansions could negatively affect LHCL’s margins, according to analysts.