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OUE Lippo Healthcare buys majority stake in Wuxi Bohai Hospital
OUE Lippo Healthcare (OUELH) on Thursday announced that it will acquire a 70 per cent stake in Wuxi Bohai Hospital Co, whichoperates Wuxi Bohai Hospital, for about 9.8 million yuan (S$1.9 million).
The vendor will retain a 30 per cent stake in the hospital. OUELH has signed a joint-venture agreement with the vendor for itself to wholly manage and operate the Grade II 100-bed hospital located in Wuxi, Jiangsu after the acquisition is completed.
OUELH also intends to rename the hospital to Wuxi Lippo Xi Nan Hospital, subject to approval by the relevant authorities.
Yet Kum Meng, chief executive of OUELH, said that this was in line with the company's asset-light strategy, as it strengthens its presence in China and enables the company to expand its hospital operations business with a controlling stake of the hospital's operations.
Additionally, OUELH will also have a platform to define and strengthen its healthcare brand in China.
The purchase will be fully funded by internal sources of the company. The completion of the acquisition and the physical takeover of the hospital are expected to occur within the fourth quarter of the current financial year ending Dec 31, 2019.
Since 2018, OUELH has embarked on a series of business and corporate initiatives in China, including a strategic partnership with China Merchants Group, and entering into the management agreements of three hospitals in Shanghai, Chongqing and Nanjing.
The latest acquisition is not expected to have any material effect on the group's earnings per share and net tangible assets per share in the current financial year, OUELH said.