Sunday, July 15th, 2018
CHICAGO, July 15 — Boeing Co is seeking to rewrite the rules for creating commercial jets as it hones plans for a new midrange jet nicknamed the 797. For decades Boeing pushed its airplanes to fly ever farther. The 787 Dreamliner, the company’s…
PETALING JAYA: IHH Healthcare Bhd, which could pump in as much as RM4.33 billion for the much coveted interest in India's Fortis Healthcare Ltd, will put in place a 100-day turnaround plan to guide Fortis for immediate stabilisation.
IHH managing director and CEO Dr Tan See Leng, who defended the pricing and structure of the deal, stated that IHH will quickly resolve the overhang in cash-strapped Fortis and renegotiate credit lines, including covering overheads and payment of wages to staff and vendors, to ensure that the hospital group can return to normal operations.
“On top of that, we've a standard global procurement pricing arrangement with some of the big vendors. We will be leveraging on what we have today and it should provide fairly good results in the short term,” Tan said in a media briefing teleconference call last Friday.
IHH, which has had an operating presence in India since 2002, will work towards facilitating margin improvement within key Fortis hospitals and in its diagnostic business, leveraging on benefits from the sharing of best practices between doctors and medical staff across its global network. It will also build SRL Diagnostic into a laboratory powerhouse and part of a global laboratory franchise, implementing strong corporate governance standards.
On Friday, IHH announced that its wholly owned subsidiary Northern TK Venture Pte Ltd was the preferred bidder to acquire a 31.1% stake in Fortis, making it the largest shareholder. IHH will pay RM2.35 billion or 170 rupees (RM9.98) a share for the stake, which will trigger a mandatory open offer for public shares of a further 26% interest in Fortis. The moves will also trigger a mandatory tender offer for a 26% stake in Fortis' listed subsidiary, Fortis Malar Hospitals Ltd, which operates a multi super-specialty corporate hospital in Chennai.
The deal will be funded with existing cash reserves and debt facilities.
“The acquisition of Fortis is a transformational opportunity to increase and deepen our presence in India,” said Tan.
Fortis is the second largest player in India by number of hospitals, operating a network of 34 hospitals across the country and internationally with a capacity of over 4,600 beds and employs more than 2,600 doctors and 13,200 support staff who catered to 2.6 million patients in FY2018.
Fortis' hospitals are complementary to IHH's existing South India-focused portfolio, and provide access to a leading platform with pan-India presence and a strong position in the North India market. IHH will benefit from the attractive upside potential in the underserved Indian healthcare infrastructure market.
“Post acquisition, we expect IHH's revenue to increase 23.7% to RM14 billion per year. The number of hospitals we have will also significantly increase from 49 to 83 and our exposure to India by revenue will also jump from 6% to 24%,” said Tan.
He deems the offer price for Fortis as reasonable and prudent, based on available information on Fortis and findings from its own due diligence.
Tan stressed that IHH adopted a disciplined approach throughout the bidding process – and requested the necessary due diligence process and audited financial statements to ensure transparency. He highlighted that IHH did not put in a fully binding offer prior to due diligence.
JOHOR BARU, July 15 — The Johor government is committed to attracting foreign investors to the state as it will create a network of facilities and job opportunities for the people. Mentri Besar Datuk Osman Sapian said he had met several foreign…
KUALA LUMPUR: In order to run government-linked companies (GLCs) professionally, their senior manager salaries should not be set above or below market rates; instead, they should be competitive in line with the challenges and responsibilities tasked in managing businesses of similar importance and size.
Assistant Professor of Management at Asia School of Business Dr Renato Lima de Oliveira said Malaysia has world-class companies that require top talent and the GLCs would have to offer competitive salaries in order to recruit and retain them.
“If you don’t offer competitive salaries, you might end up without the right mix of people running top companies: You will get those who could not get a job elsewhere because they are not top talents or those who are driven by a political agenda, which may conflict with good management,” he told Bernama in an email interview recently.
De Oliveira was asked to comment on Prime Minister Tun Dr Mahathir Mohamad’s warning that the days of top executives at the country’s GLCs drawing fat salaries regardless of their companies’ performance were over.
Citing an example, de Oliveira said aspiring politicians might be willing to run companies with below market salaries for a comparable position in the private sector in order to get public exposure and build connections, but investment decisions for political gains could come into conflict with what was best for the sustainability of the companies.
“In economics we call this adverse selection. This should be avoided as it can also open the door to corruption, which the government wants to avoid,” he said, adding that state companies had historically served, in many developing economies, as tools to build political support, just like Cabinet ministers.
De Oliveira, who is also a Research Affiliate at the Massachusetts Institute of Technology, noted that it was important to shield GLCs from political pressure and from the turnover in government and Cabinet positions, while stressing the importance of transparency.
“If GLCs are more open about their activities, expenditures, and contracts, it discourages mismanagement and corruption. But disclosure of information alone is not enough. Freedom of the press is critical for investigative journalism.
“These are reforms that the Pakatan Harapan (government) also championed and, if implemented, will help strengthen the accountability of Malaysian companies and politics in general,” De Oliveira pointed out.
He added that the opposition parties could also play a balancing role by monitoring data, performance, and contracts.
PETALING JAYA: The Malaysian Investment Development Authority (Mida) which is collaborating with Malaysia Airports Holdings Bhd (MAHB) to promote and facilitate economic activities to drive investments into the country, projects the aerospace sector to rake in some RM55.2 billion in revenue by 2030.
Speaking to reporters on Friday at the inking of a memorandum of understanding between the two parties, Mida deputy CEO Datuk N. Rajendran said the maintenance, repair and operations (MRO) segment is expected to contribute some RM20.4 billion, while aero-manufacturing and engineering and design services are expected to contribute RM21.2 billion and RM13.6 billion respectively.
This, he said, will cater to aviation players in this region.
Malaysia is home to more than 200 companies involved in MRO, aero-manufacturing, education and training, systems integration and engineering and design activities. For the first three months of 2018, the aerospace industry registered approved investments of RM175.4 million for four manufacturing projects and RM8.59 million from one MRO project.
The two parties have collaborated to explore the potential to promote and facilitate economic activities to drive investments into the country, through the KLIA Aeropolis and Subang Aerotech Park, the latter of which will be part of the Subang Airport Regeneration Initiative.
Mida will facilitate the entry of Tier 1 and Tier 2 companies which are well positioned in terms of automation and digitisation – from the manufacturing, research and development, logistics and warehousing and distribution segments – to operate here.
Malaysia’s first airport city, KLIA Aeropolis, which spans 100 acres of land, will focusing on three areas, namely air cargo and logistics, aerospace and aviation, as well as meetings, incentives, conferences and exhibitions and leisure.
The catalytic project under the air cargo and logistics cluster will be the development of a regional e-commerce and logistics hub by MAHB and Alibaba Group’s logistic arm Cainiao Smart Logistics Network (Hong Kong) Ltd on 60 acres as part of the Digital Free Trade Zone.
Subang Aerotech Park will serve as a hub for business aviation equipped with a complete aerospace ecosystem and is expected to see mature operations in 2025.
COPENHAGEN, July 15 — The biggest Nordic banks expect to launch a new piece of financial infrastructure next year, promising to dramatically speed up international transfers in one of the world’s most technologically advanced regions. The aim is…
FARNBOROUGH, July 15 — The United States has struck a preliminary deal to buy F-35 jets from Lockheed Martin worth about US$13 billion (RM52.6 billion), clearing the way for a larger multi-year purchase that aims to bring the cost per jet down to…
SEMPORNA, July 15 — Investors from China, Singapore and Kuala Lumpur are looking for opportunities to expand investments in the tourism sector in Semporna. Sabah Deputy Chief Minister Datuk Jaujan Sambakong said seven investors categorised as…
HAVANA, July 15 — Socialist Cuba is planning a series of potentially far-reaching changes, with a new constitution set to recognise the free market and private property, while dividing political powers between a president and a prime minister. In…
KUCHING: The eCommerce sector is one of the fastest growing and most attractive industries in Malaysia. The latest estimate by Statista revealed that the eCommerce platform has garnered revenue of RM4.2 billion by the end of 2017. Furthermore, the industry is expected to generate RM9.8 billion in revenue by 2022. The adoption of eCommerce platforms […]