KUALA LUMPUR (June 19): KCB Holdings Sdn Bhd, a unit of Eastern & Oriental Bhd (KL:E&O), has teamed up with Cengild Medical Bhd (KL:CENGILD) and Skyspring Sdn Bhd to develop a RM350 million multidisciplinary tertiary private hospital at Andaman Island.

Andaman Island is an artificial island off the coast of Penang, developed by E&O as part of its reclamation project.

In a statement, E&O said the three parties signed a conditional joint venture agreement on Friday. Under the agreement, KCB will hold a 30% stake, while Cengild Medical will own 25% and Skyspring 45%.

The joint venture company will subsequently set up a wholly owned operating entity to undertake the development and operation of the hospital.

Cengild Medical will provide expertise in digestive system and abdominal healthcare, including clinical, operational and strategic management support for the project.

Skyspring will oversee medical planning and specialty development, while KCB will be responsible for securing the hospital land and managing construction.

The project will be developed in two phases and is expected to have a capacity of 240 beds. Funding will be raised through bank borrowings and shareholders’ equity contributions, with KCB committing RM105 million.

E&O managing director Kok Tuck Cheong said the partnership marks another milestone in the development of Andaman Island.

“Healthcare is a key component of any sustainable township. The proposed hospital not only enhances the ecosystem of Andaman Island but also strengthens its long-term appeal as a place where families, professionals and retirees can enjoy a high quality of life,” he said.

He added that access to nearby healthcare facilities would strengthen the township’s value proposition and support future residential demand.

The hospital is targeted for completion by the fourth quarter of 2029, subject to fulfilment of conditions precedent and receipt of necessary regulatory approvals, permits and licences.

Shares of E&O ended one sen or 1.4% lower at 73 sen on Friday, giving it a market capitalisation of RM1.84 billion. Cengild, meanwhile, closed unchanged at 20 sen, valuing the company at RM166.6 million.