While plans to list the Sunway’s healthcare division was in the pipeline, the group was taking its time to build more value and branding to the healthcare division.

PETALING JAYA: Sunway Bhd shares rose 7.5% to an all-time high of RM4.01 yesterday, on the back of the group’s newly proposed corporate exercise and healthcare expansion plans.

Via a Bursa filing , Sunway had proposed a bonus issue of up to 2.8 billion new ordinary shares on the basis of four bonus shares for every three existing Sunway shares held.

The group also proposed a bonus issue of up to 631 million free warrants on the basis of three warrants for every 10 existing Sunway shares held on the same entitlement date as the proposed bonus issue of shares.

According to AmInvestment Bank, these proposals are expected to be completed by the second half of the year, and the warrants will be valid for seven years.

AmInvestment Bank is positive on the proposed bonus issue of shares and warrants, highlighting that the bonus issue of shares is a way to reward shareholders while preserving cash in the company.

“On the bonus issue of warrants, assuming full exercise of the warrants at an indicative exercise price of RM1.53 per share, Sunway could potentially raise the maximum gross proceeds of RM965.4mil.

On Wednesday, Sunway group founder and chairman Tan Sri Jeffrey Cheah said the group intends to build five new hospitals to add more medical centres to its portfolio, which is expected to incur a capital expenditure of RM1bil.

He added that while plans to list the Sunway’s healthcare division was in the pipeline, the group was taking its time to build more value and branding to the healthcare division.

Sunway’s plans include increasing the number of beds in its flagship medical centre from the current 630 to 1,000.

In 2016, the healthcare division contributed about RM40mil to the group’s net profit.

Kenanga Research said the growth of Sunway’s medical division would provide the group a sustainable income stream in the future, which would further mitigate their risk in the property and construction business which are highly cyclical.