KUALA LUMPUR, Malaysia (AP) — IHH Healthcare, Asia's top hospital operator, said Tuesday it plans to raise 6.4 billion ringgit ($2 billion) from an initial public offering in Malaysia and Singapore that will be the world's third-biggest IPO so far this year.
The company is offering up to 1.8 billion new shares in the IPO while shareholder Abraaj Capital will sell 435 million shares at an indicative price of 2.85 ringgit (90 cents) per share.
About two thirds of the shares have been bought by 22 institutional investors including Kuwait Investment Authority, asset manager Blackrock Investment and The Government of Singapore Investment Corp.
The IPO will be the third largest in the world this year after the $3 billion listing of Malaysian plantation giant Felda last week and Facebook's share sale in May which raised $16 billion.
Malaysian state investment arm Khazanah Nasional has a 48 percent stake in IHH, which owns some 30 hospitals across Asia and Turkey.
"Malaysia can claim to be a bright spot in the otherwise dark canvas of global finance," said Prime Minister Najib Razak, who launched IHH's prospectus for the share sale.
"Malaysia looks set to be Asia's top IPO market for this year, a testament to both the quality of companies being listed and resilience of the Malaysian equity market," said Nazir Razak, Chief Executive of CIMB Bank which is coordinating the listing.
He said IHH's market capitalization, estimated at nearly 23 billion ringgit ($7.3 million), will make it the second largest listed healthcare provider after HCA Holdings in New York.
Nazir said he is confident the listing can weather rocky financial markets, which have prompted some companies to delay or cancel IPO plans in Asia including a proposed $2.5 billion listing by Formula One in Singapore.
He said the listing will value Khazanah's stake at 11 billion ringgit ($3.48 billion), up from its investment cost of six billion ringgit ($1.9 billion).
IHH Managing Director Lim Cheok Peng said the group will use 90 percent of its gross proceeds of 5.13 billion ringgit ($1.6 billion) from the sale of new shares to repay debt, with the rest for working capital and listing expenses. He said the group hopes to expand in Asia, with plans to add 17 more hospitals across the region over the next five years.
IHH will start trading on Singapore and Malaysia's stock exchanges on July 25.