Ramsay Healthcare JV sells Malaysia hospital unit for $2b

The news: Australia's largest private hospital operator Ramsay Healthcare said it has sold a hospital unit jointly owned with Malaysian conglomerate Sime Darby.

The numbers: The JV will sell the unit, which operates four hospitals in Malaysia and three in Indonesia, for around $2 billion. Ramsay’s share of profit on the sale will be $630 million. The company said its share of proceeds is expected to be around $935 million, which will be used to pay down group debt, bringing down annual interest costs by $55 million.

The context: The joint venture has been looking to sell down the unit after shortlisting bidders over several months. The deal comes just months after rating agency Fitch cut its credit rating on Ramsay Healthcare due to the company’s delay in cutting debt amid high costs. Ramsay shares are down 16% so far this year amid its struggle for a recovery in earnings from its hospitals at a time of high labour and interest expenses.