Metal Component Engineering has signed a term sheet with PT Gaido Digital Medika (GDM), an Indonesian healthcare company, where the former will invest 7 billion rupiah ($0.66 million) in exchange for a 70% stake in GDM’s enlarged share capital.

The parties will be negotiating the terms and conditions of the term sheet with the intention to enter into a share purchase agreement (SPA) by Oct 30.

The agreement was signed by 5Digital, Metal Component Engineering’s fully-owned subsidiary.

The investment allows Metal Component Engineering to expand on its recent foray into the omnichannel digital health industry.

Furthermore, Indonesia has a burgeoning online economy with opportunities for digital health that extends to its provinces.

The team at 5Digital says it has assessed the opportunity and has identified smart hospital segments. It is also in discussions with medical groups in Indonesia to provide consumers access to an integrated diagnostic, telemedicine, ePharmacy and remote monitoring platform.

See also: Metal Component to raise $0.8 mil via proposed placement to fund acquisition of Gainhealth

GDM is a newly incorporated company with an initial paid up capital of 3 billion rupiah. It has not commenced business.

It was recently set up by the Gaido Group – which has a diversified portfolio of travel, retail, education, banking and real estate – as its digital health arm.

“Gaido Group and its founder have shown Metal Component Engineering specific opportunities in the West Java region for Metal Component Engineering’s smart hospital and ePharmacy segments, which allows Metal Component Engineering to go to market much faster than working alone as a Singapore company,” says the Metal Component Engineering’s chief investment officer Ahillan Pupalasingam.

“With the immediate requirements for digital health to lessen the burden of the current pandemic and the longer term strong fundamentals for growth in an exciting and large market like Indonesia, Metal Component Engineering’s board of directors have approved management to explore this investment opportunity to enter into the Indonesian healthcare market,” he adds.

Shares in Metal Component Engineering closed flat at 3.7 cents on Sept 1.

Photo: Metal Component Engineering