Temasek unit invests S$5m in HC Surgical

Singapore

TEMASEK Holdings unit Heliconia Capital is investing S$5 million in Catalist-listed HC Surgical Specialists to support the medical services group's regional expansion.

Under a July 26 investment agreement, Heliconia will invest S$5 million via a three-year bond that's convertible at its option into ordinary shares in HC Surgical.

Heliconia will also receive a three-year option to subscribe for up to S$5 million of new ordinary shares in the firm.

The issuance of the convertible bond and the grant of the option are subject to customary closing conditions, including the receipt of approval-in-principle for listing of the new shares to be issued.

"With the support from Heliconia, we will be in a stronger position to expand and deliver top quality healthcare services to our patients in Singapore and overseas," said HC Surgical chief executive officer Heah Sieu Min.

HC Surgical has 16 clinics in Singapore with a focus on endoscopy, and is the exclusive provider of colorectal cancer screening for eligible insured clients of AIA Singapore.

With the latest investment, it intends to extend its presence in Asean. The regional private healthcare market is expected to grow further, driven by ageing populations, the prevalence of chronic diseases, rising affluence, and an expanding middle class, said HC Surgical.

It expects increasing demand from Singapore and the region for its services, including endoscopic procedures such as gastroscopies and colonoscopies.

In particular, HC Surgical "has a keen interest in expanding into Vietnam" and hopes to tap Heliconia's network in Vietnam for this purpose.

Said Heliconia chief executive officer Derek Lau: "With rising awareness in preventive healthcare in Singapore and the region, we believe HCSS has tremendous growth potential."

In its results release on Thursday, HC Surgical reported a 54.4 per cent fall in net profit to S$504,000 for the fourth quarter ended May 31, 2019, despite a 27.8 per cent rise in revenue to S$5.67 million.

Other expenses saw an increase of S$982,000 due mainly to a fair value loss on derivative financial instruments, and allowance for impairment loss on goodwill.

The latest figures took full-year net profit to S$7.21 million, up 61.4 per cent from the previous year.

Earnings per share for the fourth quarter were 0.34 Singapore cents, and a final dividend of 1.2 Singapore cents per share was proposed.

HC Surgical shares closed down one Singapore cent or 1.79 per cent at 55 Singapore cents on Friday.