Singapore Medical Group announces $50 mil share purchase from existing shareholder CHA

Singapore Medical Group announces $50 mil share purchase from existing shareholder CHA

By: 
Michelle Zhu
20/02/19, 05:21 pm

SINGAPORE (Feb 20): Singapore Medical Group (SMG) says its 6.86% shareholder CHA Healthcare Singapore (CHAS) is increasing its stake in the group to 24.13% by purchasing existing shares from certain SMG shareholders via a $50 million investment.  

This comes after the group called for a trading halt following a 4.4% surge in its share price to 47 cents within the first three hours of trading today.

CHAS is an international subsidiary of CHA Health Systems, known for its women’s health and fertility expertise as one of the largest and most diversified private healthcare services groups in Asia with a focus on reproductive medicine, women’s health, stem cell research and wellness care.

The Korean healthcare group presently operates 26 general hospitals and medical centres in six countries in the world, and signed a strategic partnership with SMG in 2017 after it became a significant shareholder in the group through a $15 million private placement.

In its latest announcement, SMG says this expanded partnership with CHA will leverage the latter group’s expertise in personalised anti-ageing care to further expand its strong market leadership in key verticals, such as oncology and aesthetics.

According to SMG, the expanded strategic partnership envisages close collaboration between Chaum Wellness Center, CHA Evercell beauty rejuvenation programs and SMG’s SW1 aesthetics business to provide patients with a seamless premium care experience.

Under the enlarged Asia Pacific network between SMG and CHA, the partnership aims to provide broader clinical access in key developed countries to medical tourists from across Southeast Asia, Greater China and other fast-growing populations.

In the near term, the CHA-SMG strategic relationship intends to actively pursue projects in Vietnam, Singapore, Oceania and other key Pacific Rim markets to address the fast-growing demand for high quality services amidst a trend of diminishing fertility.

SMG adds that it intends to leverage on this strategic relationship to build out its existing Astra O&G network and establish Asia’s largest reproductive medicine platform, in part by expanding upon SMG’s existing footprint in Vietnam, Indonesia and Malaysia, with Singapore as the regional centre of excellence and repository hub for global expertise from Korea, Japan, Australia and the US.

Further, the partnership intends to to actively pursue new investment opportunities in select jurisdictions in both developed and emerging markets which SMG believes will “optimise the latent synergies and provide a balanced growth trajectory”.

“Already, we are working on an exciting pipeline of projects that will expand and strengthen our geographical footprint in both developed as well as high-growth markets where there is clear demand,” says SMG CEO and executive director Beng Teck Liang.

“I believe that our strengthened relationship will provide boundless new opportunities as we are able to reap cross-border synergies through the creation of technological knowledge share of best practices while gaining access to a patient referral network that extends across the entire Pacific Rim,” he adds.

The announcement comes in line with Beng’s previous statement – where he mentioned the group’s intention to continue growing key specialist verticals in segments such as women’s health – when SMG announced its 4Q18 earnings on Tuesday evening.

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