Thursday, February 28, 2013

EPF buys into Spire

PETALING JAYA: The Employees Provident Fund (EPF), together with two other parties, has bought into Britain's second-largest private healthcare provider early this month as part of its diversification strategy.
The £700mil (RM3.28bil) acquisition comprised 12 out of 38 hospitals belonging to the Spire Healthcare Group spread across Britain, London-based legal practice Norton Rose confirmed.
Norton Rose had advised the EPF on this particular deal.
The international legal practice's public relations manager Perry Bucksaid in an email on Tuesday that the sale was on a sale and leaseback basis. The 12 acquired hospitals would be leased back to the Spire Healthcare Group to operate under long leases.
Buck said the 12 freehold parcels were located across Britain but he was “not aware of further plans at this stage to acquire the rest of the (16) hospitals”.
The other parties in the consortium are the affiliated investment funds ofOch-Ziff Capital Management Group, Moor Park Capital Partners andGWM Group.
Moor Park Capital also advised the investors on this transaction.
On Tuesday, an EPF official said the fund had an 80% stake in the Spire Healthcare deal, while its consortium partners held the remaining 20%, although it is not known in what proportion.
The purchase is expected to provide the EPF with an annual net yield of about 7%, the official said.
Last year, the pension fund joined a Malaysian consortium comprising developer SP Setia Bhd and Sime Darby Bhd to buy into the 15.99ha Battersea Power Station located south of the Thames.
The EPF has a 20% stake in the project, while SP Setia and Sime Darby hold equal stakes of 40% each.
The first phase of the apartments was officially launched in January.
The EPF's presence in that purely Malaysian consortium to develop the Battersea Power Station is also a part of its diversification strategy, as its other purchases in London prior to this comprised mainly commercial office buildings which it had bought for yields.
Most of these commercial offices provide an annual average yield of between 5% and 6%.
The pension fund's partnership with SP Setia and Sime Darby was its first foray into international property development, although EPF chief executive Tan Sri Azlan Zainol did say last September that its role in the Battersea venture was merely as an investor.
Azlan gave a whiff of the EPF's interest to diversify into other forms of British assets during his trip to formalise the Battersea deal in September last year when he said that the fund was considering a purchase of a portfolio of between 10 and 12 buildings under a single package.
Other than a portfolio of commercial office buildings, the Battersea property development project and a Sainsbury distribution centre, the Spire Healthcare chain marks another diversification in its British holdings.
Healthcare is considered a relatively recession-proof industry. Also, Britain's National Healthcare Service is being squeezed by an ageing population.
It was reported that Spire had some debts and that the sale of 12 buildings had enabled the group to halve its debt.
Separately, the sterling fell to its lowest in two years since July 2011 after Britain was stripped of its AAA ratings.
It traded against the ringgit at RM4.68 yesterday.

No comments:

Post a Comment