Fullerton Healthcare shelves plans for listing on SGX

Singapore

MANAGED care provider Fullerton Healthcare Corp has shelved its mainboard initial public offering (IPO), citing market uncertainty.

It said its move to defer the listing plans on the Singapore Exchange (SGX) came "despite significant interest from high-quality international investors during the book-build, which was heavily oversubscribed".

The company, which provides corporate healthcare to clients, on Monday said it would continue to re-assess equity capital market options in 2017, subject to market and other conditions at the time.

When approached, the group's chief financial officer Ramesh Rajentheran said: "At the moment, the decision is simply that it won't be this year, and we will keep a watching brief on the markets in Q1 and Q2 2017 and take a view at the time.

"The company has the benefit of being in no hurry since the underlying business is performing so strongly, and because the investor meetings as part of the IPO process demonstrated that there is interest in the company both as a private and public investment which means there are a number of options for the next funding round."

Fullerton Healthcare said it expected continued strong organic growth and double-digit year-on-year increases in both revenues and operating profit for 2016, and that it would continue to target certain acquisitions, funded from its strong balance sheet and existing cash flows.

Chief executive Michael Tan said the IPO process has been valuable and the team would continue to explore opportunities for operational expansion. "We remain committed to our mission to transform Asian healthcare, making it affordable and accessible to those we serve," he said.

In late September, Fullerton Healthcare, which helps clients such as insurers and other corporates manage healthcare costs among other things, had filed its draft prospectus.

Its original plan was for an October listing, but this was delayed after both SGX and the Monetary Authority of Singapore (MAS) received a series of anonymous letters signed off by concerned doctors and investors. The complaints focused largely on the group's business model, where it charged doctors who joined its panel a percentage fee.

And the queries came after the Singapore Medical Council in September released its new Ethical Code and Ethical Guidelines that take effect from Jan 1. The revised code frowns upon the industry practice of taking a percentage of a patient's bill.

Asked about the letters, Mr Rajentheran said that "none of the questions raised questions that could not be easily answered by the company". He said the delay caused by addressing each of the queries, rather than any concerns about the issues raised, drove the decision to defer plans for an IPO for now.

As for the issue of fee model, Mr Rajentheran said: "The company is watching the debate around fees closely, and has already launched a consultation process with its panel of healthcare providers to gather their views on proposed alternative fee structures and how they can work together more closely in the future. The company continues to receive very positive feedback from clients on their ability to deliver cost savings while maintaining excellent standard of care."

The deferral of the IPO would also be a disappointment for the SGX, given that it would have been one of the biggest listings in 2016. In May, The Business Times reported that the firm was seeking to raise S$300 million from the proposed listing and that it had a pro forma market capitalisation of over S$1 billion.

When contacted, SGX declined comment.

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