Softlogic keen to buy govt’s LHCL shares
The Softlogic Group has followed on the heels of the Hemas Group’s interest in buying shares in Lanka Hospitals Corporation PLC (LHCL), should the government decide to divest these shares, saying that they too are interested, Softlogic officials said. “We have also expressed our intent in pursuing such an opportunity (to the government),” a Softlogic official told the Business Times. He said it’s a lucrative opportunity for the group which has controls in Asiri Hospital Holdings PLC (Asiri), Asiri Surgical and The Central Hospital and is the largest listed private hospital group in Sri Lanka in terms of revenue and profits.
Hemas in an announcement to the Colombo Stock Exchange (CSE) said that as a group it has been exploring opportunities in the sectors that they operate in. “We noted the interest expressed by the Government in disposing of shares in ventures such as LHCL. We have therefore, expressed our interest in pursuing this opportunity once the government initiates the official process,” it said. This came on the back of Finance Minister Ravi Karunanayake delivering the 2016 budget in parliament saying that the government is keen to streamline its portfolio of investments and will therefore exit partially or fully from those non-strategic investments in Lanka Hospitals, Hotel Developers PLC (Colombo Hilton), Hyatt Residencies, Waters Edge, Grand Oriental Hotel, Ceylinco Hospital and Mobitel by listing such investments in the Colombo Stock Exchange during 2016.
“We have been in the healthcare sector for a number of years as an innovative leader and have won the hearts and minds of our customers. We are confident of our ability to contribute significantly to the Sri Lankan healthcare services,” the Hemas announcement added.LHCL, previously Apollo Hospitals Colombo is now indirectly owned by the government with the state owned Sri Lanka Insurance Corporation holding 54.61per cent stake. LHCL currently operates with a bed capacity of 240 beds and is at around 90 per cent occupancy, but further increases in competitor capacity expansions could negatively affect LHCL’s margins, according to analysts.
According to data provided by the Central Bank of Sri Lanka, the public sector accounted for 73per cent of the hospitals and 93per cent of the available bed capacity in Sri Lanka, while handling over 90 per cent of the total patient admissions and outpatient visits to hospitals as of end 2014.In the private sector, the top five players – the Dr Neville Fernando Teaching Hospital (NFTH), Asiri, Nawaloka Hospitals PLC (Nawaloka), Durdans Hospitals (Durdans) and The Lanka Hospitals – accounted for nearly 45per cent of the private-sector bed capacity at-end 2014, with NFTH the market leader with 1,002 beds.