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OUE Lippo Healthcare to build international hospital in Shenzhen with China Merchants

OUE Lippo Healthcare (OUELH) is looking to develop and operate an international hospital in Prince Bay, Shenzhen in partnership with Hong Kong-based, state-owned conglomerate China Merchants Group. 

The company on Wednesday said it has signed a non-binding letter of intent with China Merchants Shekou Industrial Zone Holdings (CMSK) to jointly build, run and manage a high-end international hospital which is expected to have more than 200 beds serving the local community. 

CMSK is listed on the Shenzhen Stock Exchange and is involved in industrial park development and management, community development and management, and cruise infrastructure development and management. 

The proposed hospital is set to benefit from the growth of the medical tourism industry in the Guangdong-Hong Kong-Macao Greater Bay Area, said Lee Yi Shyan, chairman of OUELH. "As a leading region for new and high technological industries in China, the Greater Bay Area will develop as a dominant economic powerhouse in the coming years," he said.

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Shekou, where the proposed project is located, is at the southern tip of Nanshan, with Hong Kong just across the Shenzhen Bay. Shekou was designated a Free Trade Zone by the Chinese government in 2015. It is a vibrant commercial area, home to many Fortune 500 Chinese companies attracted to its connectivity, location and growth potential, OUELH said.

Stephen Riady, executive chairman of parent firm OUE and board director of OUELH, added that the flagship development by OUELH and China Merchants Group is testament to the group's commitment to grow its healthcare business in China.

In November 2017, OUELH announced a strategic partnership with China Merchants Group to grow its healthcare business in China. Since then, the partnership has resulted in projects such as the joint operation of the Shanghai Changhang Hospital in Pudong, Shanghai, which was announced in June this year.

OUELH said it will continue to extend its Pan-Asian healthcare presence, including in China. Besides its long-term collaboration with China Merchants Group, it also has support from its shareholders, OUE and Itochu Group, which own 64.4 per cent and 25.3 per cent in the company respectively. 

The project is subject to due diligence, entry into definitive agreements and the obtaining of relevant regulatory approvals by both sides. Both parties will negotiate the terms of the definitive agreements within a non-exclusive negotiation period ending on June 30, 2019.

Shares of OUELH added 0.4 Singapore cent or 7.3 per cent to S$0.059.