IHH Healthcare Bhd, a leading premium global healthcare provider, announced yesterday that it will increase its majority equity interest in its existing Turkey subsidiary, Acibadem Holding, from 60% to approximately 90%, pursuant to the shareholders’ agreement (SHA) which was entered into in connection with IHH’s acquisition of a 60% equity interest in Acibadem Holding in 2011.
Under the SHA, Mehmet Ali Aydinlar and his wife Hatice Seher Aydinlar (collectively, “Aydinlar”) have the option to convert up to 15% equity interest held by them in Acibadem Holding into new IHH shares for a period of 10 years from 24 January 2012 (Aydinlar Option).
Bagan Lalang Ventures Sdn Bhd (Bagan Lalang), which currently owns 15% equity interest in Acibadem Holding, also has the option to convert up to 15% of its equity interest into new IHH shares (BLV Option) provided that the Aydinlar Option is exercised.
Mehmet Ali Aydinlar and Hatice Seher Aydinlar have exercised their option to convert a total of approximately 229.2 million shares of Acibadem Holding, representing approximately 15% equity interest in Acibadem Holding, for approximately 262.2 million new IHH shares.
Bagan Lalang has also exercised its option (on identical terms) to convert a total of approximately 229.2 million shares of Acibadem Holding, representing approximately 15% equity interest in Acibadem Holding, for approximately 262.2 million new IHH shares.
Mehmet Ali Aydinlar is the founder of Acibadem Holding. Bagan Lalang is an indirect wholly-owned subsidiary of Khazanah Nasional Bhd which is also a substantial shareholder of IHH.
The number of new IHH shares to be issued is computed in accordance with the terms of the SHA, based on the relative fair market value of the Acibadem shares and IHH shares. The Board of Directors of IHH has engaged Deutsche Bank as its financial adviser to provide an opinion on the valuation range of Acibadem Holding.
The transaction simplifies the shareholding structure of Acibadem Holding and allows IHH to further consolidate its control in the Turkish operations. This will give IHH the financial and operational flexibility to deleverage Acibadem Holding’s balance sheet.
Post completion of the transaction, IHH will capitalise the existing subordinated loans of US$250 million equivalent which are currently supported by Acibadem Holding’s shareholders and to potentially divest Acibadem Holding’s non-core assets as part of its plan to significantly reduce its foreign currency debt.
Upon completion of the transaction, Aydinlar’s shareholding in IHH will increase from 3.23% to 6.21%, while Khazanah’s shareholding will increase from 40.33% to 40.91%.
Dr. Tan See Leng, Managing Director and Chief Executive Officer of IHH, said, “Increasing our majority interest in Acibadem Holding presents a clear opportunity for IHH to improve Acibadem Holding’s financial and operational performance in the long run. Upon completion of this transaction and subsequent deleveraging of Acibadem Holding’s balance sheet, Acibadem Holding will be better positioned to ride out the forex volatility.”
Acibadem Holding is one of Turkey’s leading private healthcare providers, managing 21 hospitals and 16 clinics across Turkey, Macedonia and Bulgaria. It is known for high quality diagnostic services and clinical treatment offerings for Turkish and international patients, equipped with state-of-the-art medical technologies including smart radiotherapy, robotic surgery, intraoperative radiotherapy and digital tomosynthesis mammography.
The acquisition is expected to be completed in the fourth quarter of 2018, subject to regulatory approval including from Bank Negara Malaysia.