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TalkMed's China unit to provide management services for Singapore Cancer Centre brand in China
TalkMed Group's wholly owned subsidiary TalkMed China (TMC) entered into agreements with Beijing New Hope Management (BNH) for TMC to offer management services for the Singapore Cancer Centre branded oncology services in China.
The group said that this is in line with its plan to expand its operations in the region. Under the agreements, the Singapore Cancer Centre brand will be introduced to China, allowing the group to capitalise on the potential demand for quality Singapore medical oncology services in the market.
Under the management services agreement (MSA) which is valid for three years, it is envisaged that the group will have an advisory and supervisory responsibility for the general management of the Singapore Cancer Centre clinic at Beijing Parkway Jingshun Hospital located at the Chaoyang District of Beijing.
The group will also be paid a management fee equivalent to 4 per cent of the clinic's earnings before interest, tax, depreciation and amortisation.
It will also have an exclusive right for the provision of any management services relating to oncology medical services, which may be set up by BNH or its subsidiaries or associates.
TalkMed China will also have an investment right upon the expiry of the second anniversary from the date of the MSA to acquire 30 per cent of the equity interest in BNH at the higher of eight times of the trailing 12 months profit after tax, less net debt and minority interests, or three million yuan (S$613,938).
Under the licensing agreement, again valid for three years, the group will grant BNH a non-exclusive, non-transferable and non-assignable right to utilise the Singapore Cancer Centre service mark at its clinic, and be paid a licence fee equivalent to 1.5 per cent of the net revenue of the clinic.
The agreements are not expected to have any material impact on the net tangible assets per share and earnings per share of the group for the financial year ended Dec 31, 2017.