China Merchant Lippo Changshu O&G Hospital Co., Ltd, an associated company of SGX-listed OUE Lippo Healthcare, has entered into a loan agreement with China Construction Bank, Changshu, for the grant of a loan of RMB115 million ($24 million) for 15 years.
China Merchant Lippo Changshu O&G Hospital Co., Ltd, is the operating company of the China Merchant-Lippo obstetrics and gynaecology hospital in Changshu.
It is wholly owned by China Merchants Lippo Hospital Management (Shenzhen) Limited, which is indirectly owned in equal proportion by OUE Lippo Healthcare and OUE Lippo Healthcare’s independent third-party joint venture partner, China Merchants Shekou Industrial Zone Holdings Co., Ltd.
According to OUE Lippo Healthcare, the loan will be used by China Merchant Lippo Changshu O&G Hospital Co., Ltd, for capital expenditure, renovations and the procurement of equipment and systems by the Changshu Hospital.
The loan is secured by corporate guarantees by OUE Lippo Healthcare and China Merchants Shekou Industrial Zone Holdings Co., Ltd in favour of the lender for 50% of the loan respectively, in proportion for their respective effective shareholding in China Merchant Lippo Changshu O&G Hospital Co., Ltd.
The loan is also secured by “comfort letters” by OUE Lippo Healthcare and China Merchants Shekou Industrial Zone Holdings Co., Ltd. to say that China Merchant Lippo Changshu O&G Hospital Co., Ltd’s obligations under the loan agreement would be satisfied.
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Shares in OUE Lippo Healthcare closed flat at 3.4 cents on July 29.
