E&O, Cengild Medical, Skyspring plan RM350 mil Andaman Island hospital JV

PETALING JAYA (June 20): Eastern & Oriental Bhd (E&O) has proposed the establishment of a multidisciplinary tertiary private hospital at Andaman Island in Penang, forming a strategic component of the 760-acre township's integrated master plan.

It said in a Bursa filing yesterday that the property developer's indirect wholly-owned subsidiary, KCB Holdings Sdn Bhd (KCB), signed a conditional joint venture (JV) agreement yesterday with Cengild Medical Bhd and Skyspring Sdn Bhd for the proposed establishment of the hospital within the Gurney Green district at Andaman Island.

Under the JV, the yet-to-be-incorporated joint venture holding company (Hold Co) will be owned 45% by Skyspring, 30% by KCB and 25% by Cengild Medical. Hold Co will subsequently set up a wholly-owned operating company to undertake the building, construction, establishment, management and operation of the hospital.

The proposed hospital has an estimated total development cost of RM350 million, expected to be funded through bank borrowings and/or shareholders' equity contributions, with KCB's commitment amounting to RM105 million.

The facility is planned for 240 beds across two phases, and the project is targeted for completion by the fourth quarter of 2029, subject to fulfilment of conditions precedent and receipt of all necessary regulatory approvals.

The parties are in the process of identifying the hospital land, which will comprise a parcel of approximately not less than 2 acres within Andaman Island — reclaimed land located off the foreshore near Mukim 18, District of Tanjung Tokong, Pulau Pinang. KCB will identify and assist in the procurement of the hospital land and provide overall management services for its construction.

Cengild Medical, a healthcare provider specialising in gastrointestinal disorders, liver diseases and obesity treatment, will provide clinical, operational and strategic management expertise to support the hospital's development and future operations.

Skyspring, a special purpose vehicle incorporated in May 2026, will oversee the planning and development of the hospital's medical specialties and the formulation of the overall medical planning strategy.

E&O managing director Kok Tuck Cheong said the hospital is a key component of the township's long-term ecosystem. He said the proposed hospital would strengthen Andaman Island's appeal as a place for families, professionals and retirees, while supporting the state's growing medical tourism sector.

The JV was announced voluntarily as all applicable percentage ratios fall below 5%, with the highest ratio at approximately 4.5%. The proposed joint venture does not require E&O shareholder approval and will take immediate effect upon obtaining approval from Cengild Medical shareholders at an extraordinary general meeting to be convened.

The JV is not expected to have any immediate material impact on E&O's net assets or earnings for the financial year ending March 31, 2027, though it is expected to contribute positively to future earnings once the hospital commences operations.

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