Singhe Hospitals offers up 25% stake via IPO

Wednesday, 4 March 2015 00:00 - - {{hitsCtrl.values.hits}}

Merchant Bank of Sri Lanka (MBSL) Corporate Advisory and Capital Markets Deputy General Manager A.M.A. Cader (right) addressing the press conference. Others from left: Singhe Hospitals Director Lakshika Weerasinghe, Director P.W.M. Jayakody Muhandiram, Managing Director Navinda Weerasinghe and Chairman A.M. Weerasinghe – Pic by Upul Abayasekara By Channa Fernandopulle The recently-announced Singhe Hospitals Ltd. Initial Public Offering (IPO) will see a 25% stake in the company being offered up for public purchase. Fresh details on the Rs. 250 million IPO, comprising 100 million shares valued at Rs. 2.50 per share, were disclosed by the hospital’s senior management during a recent media briefing. Situated in the heart of Ratnapura, Singhe Hospital is a BOI approved project that was established in December 2009. The first private hospital to be established in the Sabaragamuwa Province, Singhe Hospital enjoys a five-year tax holiday and reportedly records 15,000-20,000 patient visits monthly. Reaffirming his confidence in the hospital as a viable investment opportunity, founder and Chairman of Singhe Hospital A.M. Weerasinghe projected a positive outlook for the facility going forward. “Singhe Hospital maintains a highly competitive stance against leading private hospitals in terms of facilities, technology and hospitality and the number of patients we see is increasing each day. This is a clear indication that Singhe Hospital is growing into a trusted tertiary care institute capable of providing top notch medical services not only in Sabaragamuwa Province but the island as a whole,” he stated. Proceeds of the IPO will be directed towards the purchase of medical equipment, including new laparoscopy and mammography machines, in addition to the planned expansion of lab facilities, the setting up of an eye surgical unit, construction of a new car park and the purchase of fresh pharmaceutical and lab stocks. Notably, Merchant Bank of Sri Lanka Deputy General Manager – Corporate Advisory and Capital Markets A.M.A. Cader clarified that portions of the IPO proceeds would also be directed towards maintaining the company’s gearing ratio at an optimal level. Singhe Hospitals posted revenue of Rs. 164 million as at 31 March 2014, against Rs. 33.3 million in 2013. The company incurred finance costs of Rs. 51.9 million, up from a previous Rs. 50.6 million leading to a Rs. 131.6 million loss for the year, as compared with a loss of Rs. 107.9 million in 2013. Notably total comprehensive income for the year declined sharply to Rs. 37.1 million boosted significantly by a Rs. 94.5 million gain on revaluation of land and building in 2014. Basic loss per share stood at Rs. 4.69, against a previous Rs. 7.19 per share.