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Saturday, November 15, 2008

Columbia Asia to invest RM225m in 3 new hospitals

Regional healthcare provider Columbia Asia, which currently operates five community hospitals in Malaysia, is investing about RM225 million in three new hospitals here.

Once completed by 2010, the company will have a total of 11 hospitals nationwide since the launch of its first hospital in Seremban in 1994, said chairman Rick Evans yesterday.

EVANS: RM116 million Islamic loan to part finance the building of the three hospitals

Close to 60 per cent of the total cost of the three hospitals is being financed through bank loans while the rest is from its various private equity owners.

In Malaysia, the Employees Provident Fund (EPF) holds 30 per cent of Columbia Asia Sdn Bhd.
Evans told reporters this after the signing of a RM116 million syndicated Islamic loan with Bank Rakyat, RHB Islamic Bank Bhd and Bank Muamalat Malaysia Bhd in Kuala Lumpur yesterday.

"This financing will only part-finance the construction of the three hospitals and the rest will be raised from our investors," he said.

Columbia Asia is the Asian entity for Seattle-based investment and money manager Columbia Pacific, which recently raised a total equity of US$325 million (RM1.17 billion) in its second round of financing for its Asian operations in four countries, including Vietnam, Indonesia and India.

In Malaysia, apart from the three new hospitals to be built, three others are now under construction. The six new hospitals are in Balakong, Bukit Rimau, Kota Damansara, Nusajaya, Setapak and Bintulu.

By 2010, Columbia Asia will have 21 hospitals and an airport clinic in India, 11 hospitals here, three in Vietnam and three in Indonesia, together representing an investment of over US$600 million.

"We are looking at expanding to the Philippines," said Evans, adding that the healthcare business is not affected by any economic downturn.

Unlike some hospitals, Columbia Asia is not interested in medical tourism.

"Malaysians used to go to Singapore for treatment some time back and now they prefer to stay home. Indonesians now come here but we believe that not so long from now, they will prefer to stay in their country too," he said.

Evans said Columbia Asia aims to be the preferred choice for employers, insurance companies and families. Some 60 per cent of the company's revenue in Malaysia was contributed by third-party administrators like companies and insurers.

Columbia Asia hospitals make about RM3 million a month in revenue and a new hospital usually breaks even in a year.

By Business Times (by Roziana Hamsawi)

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