Itochu Corp to take 25.3% stake in OUELH

From left: Mr Lee Yi Shyan, chairman, OUE Lippo Healthcare; Dr Stephen Riady, executive chairman, OUE; Mr Masahiro Okafuji, president and CEO, Itochu; Mr Yuji Fukuda, CEO for Asia & Oceania, Itochu. OUE Lippo Healthcare and Itochu are collaborating t
From left: Mr Lee Yi Shyan, chairman, OUE Lippo Healthcare; Dr Stephen Riady, executive chairman, OUE; Mr Masahiro Okafuji, president and CEO, Itochu; Mr Yuji Fukuda, CEO for Asia & Oceania, Itochu. OUE Lippo Healthcare and Itochu are collaborating to grow the high-potential Asian healthcare market.PHOTO: OUE LIPPO HEALTHCARE
OUE Lippo Healthcare's Wuxi Hospital in China, an integrated 800-bed facility with retail facilities and service apartments.
OUE Lippo Healthcare's Wuxi Hospital in China, an integrated 800-bed facility with retail facilities and service apartments.PHOTO: OUELH

Funds raised will help firm develop healthcare business

OUE Lippo Healthcare (OUELH) is raising $78.75 million via a private placement to trading company Itochu Corp, which it says will strengthen its financial position and enable it to execute its business plans.

Itochu, through its indirect wholly-owned subsidiary Browny Healthcare, will acquire the shares at an issue price of 14 Singapore cents per share, giving it a 25.3 per cent stake in OUELH on a fully diluted basis.

The issue price represents a premium of 15.7 per cent to the volume weighted average price of 12.1 cents per share for trades done on the Singapore Exchange (SGX) on Monday. Trading in OUELH shares was halted yesterday morning pending the announcement.

The placement is contingent on, among other things, approval from SGX, with the new shares expected to be listed on the Catalist-board on or before Feb 10.

The placement shares will be allotted and issued following the general share issue mandate obtained from shareholders at the company's annual general meeting in July last year.

Dr Stephen Riady, executive chairman of OUE and board director of OUELH, said: "With its extensive network in Asia, Itochu will be a key partner for OUE Lippo Healthcare as it embarks on its growth path to become a leading healthcare company in Asia."

OUELH is a subsidiary company of OUE, which in turn is a member company of conglomerate Lippo Group.

This comes as Tokyo Stock Exchange-listed Itochu, which has a market capital of more than US$30 billion (S$40 billion), is seeking to diversify into Asia's expanding healthcare market. In recent years, it has been building a new business portfolio in the healthcare sector, including hospital management and medical devices & equipment.

Mr Masahiro Okafuji, president and chief executive of Itochu, said: "We see the tremendous potential of the Asian healthcare market. Taking a stake in OUE Lippo Healthcare allows Itochu to partner with the Lippo Group to gain a strategic foothold in this growing sector."

The net proceeds from the placement, after expenses of $1.3 million, should total $77.45 million. OUELH, formerly known as International Healthway Corporation, said 40 to 50 per cent of this will go towards general working capital purposes and the balance towards developing its healthcare business and healthcare-related projects.

A version of this article appeared in the print edition of The Straits Times on January 11, 2018, with the headline 'Itochu Corp to take 25.3% stake in OUELH'. Print Edition | Subscribe