KPJ Healthcare to raise RM138.77m from REIT injection

KUALA LUMPUR: KPJ Healthcare Bhd is set to inject three of its hospital buildings into Al-Aqar KPJ REIT in return for RM138.77 million, in a combination of cash and new KPJ REIT units.

"The exercise involves the sale of two hospital buildings in Malaysia, namely Bandar Baru Klang Specialist Hospital (BBK) in Selangor, and Kluang Utama Specialist Hospital (KUSH) in Johor," it said in a statement on Friday, Dec 17.

In addition, the Rumah Sakit Bumi Serpong Damai (BSD) building in Jakarta Indonesia will also be sold, under the planned building injection exercise.

The sale of these three assets is expected to generate an estimated capital gain of approximately RM1.13 million for the KPJ Group.

It said, the asset injection allows the group to unlock the value, and realise its investment in the said properties.

"Proceeds from these asset sales will be used to pare down the group's borrowings and trim the gearing to 0.46 times from 0.58 times, resulting in an interest cost saving of approximately RM2.21 million per annum," it added.

To retain the use of the buildings, the group will subsequently rent, via a long term lease of 15 years, with an option to extend the tenure for another 15.

According to the group, the sale and lease back of BBK, KUSH, and BSD is the fourth tranche of its REIT injective, since the exercise was first initiated in 2006.

"The first tranche involved the injection of six hospital buildings, valued at RM481.25 million, the second entailed the sale of five buildings for RM170.04 million and the third comprised seven hospital buildings and one nursing college for RM292.5 million," it said. — Bernama