KUALA LUMPUR • Malaysia's sovereign wealth fund has started restructuring its portfolio under the country's new government, with the sale of shares in a leading Singapore medical firm.
Khazanah Nasional yesterday said it is offloading a 16 per cent slice of IHH Healthcare to Mitsui & Co for about RM8.42 billion (S$2.76 billion) in cash.
The deal will allow Mitsui to raise its stake in Singapore-listed IHH to 32.9 per cent and become the biggest shareholder of one of Asia's largest private hospital groups. Khazanah's stake will be cut to about 26 per cent.
"The divestment is part of Khazanah's strategy to grow the businesses that we are invested in and to find the appropriate times and value to create liquidity for our future capital and investment needs," said Khazanah managing director Shahril Ridza Ridzuan.
Reuters had reported in August that Khazanah will likely cut its stakes in some top firms as the new government of Prime Minister Mahathir Mohamad overhauls the sovereign wealth fund's investment strategy. The report noted that it could also review its stake in IHH Healthcare.
Bankers say IHH remains one of Khazanah's top performing investments but the fund will face challenges to sell down stakes in its other Malaysian-focused portfolio companies.
The deal is subject to the healthcare group completing a previously announced acquisition of a 30 per cent additional equity stake in a Turkey-based healthcare group, Acibadem Saglik Yatirimlari Holding.
IHH shares jumped 8.2 per cent in early trade yesterday before closing up 5.3 per cent, or nine cents, to $1.80.