Zecon sells 49% stake in unit for RM155mil
KUCHING: Zecon Bhd is disposing of a 49% equity interest in wholly-owned subsidiary Zecon Medicare Sdn Bhd to the Sarawak Government’s investment arm for RM155mil cash.
Zecon Medicare has a 30-year concession for the proposed children’s specialist hospital, Universiti Kebangsaan Malaysia (UKM), in Cheras. The new 243-bed hospital is expected to be completed in November 2018.
The hospital project, costing RM606mil, is built through a public-private partnership on a build, lease, maintain and transfer concept. The proposed hospital will also have 54 apartment units to provide family-centred care.
Zecon Medicare inked a share sale agreement with Sarawak State Financial Secretary Incorporated for the disposal of 3.92 million shares here yesterday.
Zecon Medicare managing director Datuk Zainal Abidin Ahmad said the sale of the 49% stake in Zecon Medicare was based on the group’s good partnership with the Sarawak Government and to leverage on the latter’s strong financial strength.
Zainal, who is also Zecon group managing director, said the board believes the proposed disposal was timely and provided an opportunity for the company to partially monetise its investment in Zecon Medicare at an attractive price.
The proposed share sale deal is expected to be completed by the first half of 2018.
From the sale proceeds, Zainal said RM70mil would be used to pare down bank borrowings, which stood at RM350.4mil, while RM84.8mil would be for the group’s working capital.