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Northwest China's largest private hospital, the Chang'an Hospital, will take over 100 rival facilities with a 10 billion yuan (US$1.2 billion) loan from HSBC, Europe's largest bank.
HSBC will provide strategic consulting, financial investment and financial consultancy services to assist the hospital with the strategic designing of fund raising, acquisition, merger, re-organization and operational scale expansion, according to sources from the Chang'an Information Industry (Group) Co, Chang'an Hospital's parent firm.
HSBC will arrange a fund-raising scheme for Chang'an Hospital and help it raise up to 10 billion yuan (US$1.2 billion) from the overseas market.
Co-operation between the Chang'an Hospital and HSBC is based on the two partners' advantages in terms of modern hospital operations and mature capital management skills and a wide fund-raising network.
The target for the hospital is to acquire, merge and trust 100 small and medium-sized counterparts around the nation within two years to set up a one-hundred hospital group.
HSBC has also advised Chang'an to invite 300 famous medical professionals around China to establish a nation-wide expert network and promised to offer robust support.
According to Chang'an Hospital Vice-President Fang Hong, it has signed a framework agreement last Monday with HSBC and is striving to get listed in Hong Kong in two years, depending on the banking giant's support.
Chang'an Hospital, which is located in the Xi'an Economic and Technological Development Area of Northwest China's Shannxi Province, started operating at the beginning of 2003, with a total investment of 800 million yuan (US$96.39 million).
The private hospital's sales revenue totaled to 70 million yuan (US$8.43 million) last year, while its net profit hit 10 million yuan (US$1.2 million).
"If Chang'an can become listed in Hong Kong, it will be the first mainland hospital to enter the special administrative region's market," said Fang.
HSBC, which has the biggest operations of any overseas bank in China, has been expanding in the nation for the past three years.
It bought an eight per cent stake in Bank of Shanghai in 2001 and this year started offering credit cards with its local partner.
HSBC's profits in China more than doubled to 324.7 million yuan (US$39.12 million) last year.
Following hot on the heels of the agreement with HSBC, Chang'an Hospital signed a co-operation letter of intent with Hong Kong Shun Shing International Investment Co Ltd last Tuesday (July 20), to set up a medical joint venture - Hong Kong International Medical Group Co Ltd.
Shun Shing will be responsible for handling all commercial registration procedures for the establishment of the joint venture in Hong Kong, who will conduct the feasibility research report and formulate the business plan.
Shun Shing International Investment Co Ltd will spend 200 million yuan (US$24.1 million) on the construction of a hospital in Hong Kong after the feasibility report is completed.
Shun Shing has also signed other contracts with Chang'an for co-operation on construction of the second and third phases of the Chang'an Hospital in Xi'an.
(China Daily July 27, 2004)
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