Malaysian wealth fund Khazanah selling $2.7b IHH stake to Mitsui

KUALA LUMPUR/SINGAPORE : Malaysian sovereign wealth fund Khazanah Nasional is selling a 16 per cent stake in IHH Healthcare to Japan's Mitsui & Co for RM8.42 billion (S$2.7 billion) in cash, kicking off a restructuring of its portfolio under a new government.

In separate statements yesterday, Khazanah and Mitsui said the Japanese trading house is going to raise its stake in 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.

Citing sources, Reuters had reported in August that Khazanah will likely cut stakes in some firms as the new government of Malaysian Prime Minister Mahathir Mohamad overhauls the fund's investment strategy, and that it could also review its stake in IHH Healthcare.

A senior banker at a Malaysian bank that has done deals with Khazanah and other state-linked companies said this marked the beginning of a rationalisation exercise for the fund.

"Probably they will maintain some of the more strategic investments, like some of the utility holdings.

"Some of the non-core ones and what they think they can rationalise, they will rationalise," the banker said, declining to be named.

Bankers expect the US$37.5 billion (S$51.3 billion) fund to trim stakes in lender CIMB Group Holdings and regional telecoms firm Axiata Group, and also restructure struggling Telekom Malaysia in the coming months. - REUTERS