Le Kang Assets (Shenzhen), an associated company of SGX-listed OUE Lippo Healthcare (OUELH), has entered into a loan agreement with the Bank of China (BoC) for the grant of a RMB330 million ($70 million) loan on March 28.
The loan will be used for the construction and renovation of Prince Bay Hospital.
According to the SGX filing, the development of the hospital is progressing as planned. Its main structural construction is slated to be completed in the first half of 2022.
The hospital is expected to be commissioned in 2024 to serve the affluent residents in the Guangdong-Hong Kong-Macao Greater Bay Area.
Upon its opening, Prince Bay Hospital will have over 200 beds, and is set to benefit from the growth of the medical tourism industry within the Greater Bay Area.
Le Kang Assets is a joint venture company (JVCo) that is indirectly owned by China Merchants Lippo Hospital Management (Shenzhen) Limited, the OUE Lippo Healthcare’s joint venture company with independent third-party, China Merchants Shekou Industrial Zone Holdings Co., Ltd.
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The JVCo holds the land and property of the hospital, which is located in Shenzhen, China.
“The loan is a significant milestone for the company as it reduces our total funding commitment and we can deploy our financial resources to other growth opportunities. It is also a reflection of the confidence of Bank of China, as the lender, on the future prospects of Prince Bay Hospital,” says Yet Kum Meng, CEO of OUELH.
According to OUELH, the loan is in line with its ongoing initiatives to bolster its financial position as part of its roadmap to enhance its capital structure.
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The loan will have no impact on OUELH’s gearing as the borrower is the JVCo. The loan is also secured on the JVCo’s shares and the land and property of Prince Bay Hospital.
Shares in OUELH closed flat at 3.5 cents on March 28.
