SINGAPORE - Eye care provider ISEC Healthcare is claiming S$159,465.30 from vendors of four clinics after three of the clinics failed to reach profit targets that had been set in 2016.
The clinics, collectively called the JL Medical Group of companies, were acquired for S$13.9 million in 2016. At the time, the vendors of JL Medical Group provided profit guarantee for each of the four clinics for each of the five financial years beginning Jan 1, 2017.
If the audited profit after tax for a clinic falls below 90 per cent of its profit guarantee in a guaranteed year, the vendors had agreed to pay ISEC the difference between the actual audited post-tax profit and 90 per cent of the profit guarantee upon demand.
For the year ended December 2017, only one of the four clinics earned at least 90 per cent of its profit guarantee. The other three were affected by lower than expected patient visits, ISEC said.
The total shortfall is S$159.465.30, which is the amount that the company is claiming from the vendors. ISEC said that it has served notice to the vendors.