OUE Lippo Healthcare said on Wednesday that it entered a non-binding letter of intent with Shenzhen-listed China Merchants Shekou Industrial Zone Holdings, or CMSK, to develop and operate a high-end international hospital in Prince Bay, Shenzhen, in China.
The proposed hospital project is expected to have more than 200 beds to serve the local community and to benefit from the medical tourism industry in the Guangdong-Hong Kong-Macao Greater Bay Area, OUE Lippo Healthcare said in a filing to SGX after the market close on Wednesday.
CMSK is a member company of Hong Kong-based, China state-owned conglomerate China Merchants Group, it said.
Under the agreement, OUELH and CMSK plan to set up a 50:50 offshore joint venture company to hold the onshore company holding the land use rights, it said.
Stephen Riady, executive chairman of OUE and board director of OUELH, said the project was part of the company’s efforts to expand its healthcare business in China.
“The hospital project is a significant milestone in strengthening our partnership with China Merchants Group, bringing together our international healthcare expertise and their in-depth local market knowledge,” Riady said in the statement.
OUELH pointed to the economic importance of China’s Greater Bay Area as supportive of the project, with a cluster of 11 cities and around 5 percent of the mainland’s total population.
The proposed project is subject to due diligence, definitive agreements and obtaining regulatory approvals, the filing said.
CMSK is involved in industrial park and community development and management, and cruise infrastructure development and management, the filing said.