“We still have headroom on our balance sheet. I can still borrow. From a stakeholder perspective, can we do this? Sure, we can think about it. Is it something that we need to do now? We don’t need capital; our cash flows are strong; our debt headroom is high; our debt levels are low, so we still have a lot of leg to run on,” Kadambi says. IHH’s net debt-to-equity ratio as at March 31 stood at 0.4 times. “Never say never, but nothing, at least in the immediate future that I can see.” That could disappoint PLife REIT’s unitholders.
IHH Healthcare is the sponsor and major unitholder of ParkwayLife REIT (PLife REIT). In 2021, PLife REIT and IHH signed new master lease agreements for three Singapore hospitals, Mount Elizabeth Orchard, Gleneagles and Parkway East Hospital for 20 years to end-December 2042. The agreements include a $150 million renewal capex agreement, which will be used mainly for Mount Elizabeth Orchard. Included in the new agreement is a right of first refusal (ROFR) agreement for Mount Elizabeth Novena Hospital.
When The Edge Singapore caught up with Dilip Kadambi, group CFO of IHH, and asked whether IHH planned to offer Mount Elizabeth Novena to PLife REIT, he indicated that IHH does not need capital at present. “From a stakeholder perspective, and my leverage was so little, what reason would I have to sell it? Even if I sell it, what will I do with the capital?” he asks.
