Kuwait may spend US$150m on IHH IPO

SINGAPORE/KUALA LUMPUR: Sovereign wealth fund Kuwait Investment
Authority (KIA) will invest about US$150 million in Malaysian firm IHH
Healthcare’s planned US$2 billion IPO in Kuala Lumpur and Singapore,
two sources with direct knowledge of the deal said.

The investment is poised to make KIA the second-biggest investor in the Malaysian healthcare firm’s IPO.


It will be the fund’s biggest investment in an Asian flotation
since it poured US$800 million into Agricultural Bank of China’s US$21
billion offering in 2010.

With a heavy reliance on cornerstone investors and domestic demand,
Malaysia has bucked the dismal IPO trend in other markets such as
Singapore, where motor racing firm Formula One decided to delay its
near US$3 billion offering due to volatile markets.


In the latest blow to Asian deals, soccer club Manchester United also
ditched its plans for an Asian stock market flotation and is preparing
to list in the United States, IFR reported on today.

Cornerstone investors back many Asian listings, committing to buy
large, guaranteed stakes and agreeing to a lock-up period during which
they will not sell their shares.

KIA, which manages US$280 billion in assets, invests in big-ticket
IPOs, but has been lately keeping its powder dry amid volatile markets,
banking sources have said earlier.

Malaysia pension fund EPF will separately invest about US$200
million in the IHH IPO, making it the biggest investor in the deal,
said the sources, who could not be named because the details of the
deal are not public.

“These two are the biggest cornerstone investors in IHH,” one of
the sources told Reuters. IHH declined to comment. EPF and KIA could
not be immediately reached for comment.

IHH Healthcare, which is partly owned by state investor Khazanah
Nasional Berhad, is the country’s second-biggest IPO this year after
Felda Global Ventures Holdings priced its US$3.1 billion IPO late on
Wednesday near the top of an indicative range.


The IHH IPO is expected to be priced in the second week of July and
the listing is scheduled in the week starting July 23, according to a
term sheet seen by Reuters.

IHH this week already locked in BlackRock Inc, Capital Group and
Och-Ziff Capital Management Group as cornerstone investors for its dual
listing, sources told Reuters.

The board of International Finance Corp (IFC), the financial arm of
the World Bank, has also approved a proposal to become a cornerstone
investor in IHH’s offering, a source said.

IHH has been on an aggressive buying spree in the past few years.
It now owns Turkish hospital group Acibadem AS , Singapore’s Parkway
Holdings, India’s Apollo Hospitals Enterprise Ltd and Malaysia-based
Pantai Hospitals and International Medical University.

The firm is offering 2.2 billion shares, out of which 80 percent
will be new shares. The sale amounts to some 25 percent of its enlarged
capital.


CIMB, Deutsche Bank and Bank of America-Merrill Lynch are the lead
global co-ordinators, with Credit Suisse, DBS, Goldman Sachs and
Maybank acting as joint bookrunners in the deal.


Nomura, Singapore’s OCBC and UBS are the co-lead managers. - Reuters