Investors queue up for medical opportunities

Lucrative opportunities in the medical market have caused a stir amongst investors
Photo: Le Toan

VinaCapital Vietnam Opportunity Fund (VOF) announced early last week that it had invested $9 million into Thai Hoa international hospital to acquire a controlling stake in the healthcare facility.

“Thai Hoa privately-run hospital, which currently has 200 beds, is capable of handling more than 300,000 patients per year. This number is expected to increase significantly through 2016 and 2017 thanks to a government programme to establish public-private partnerships between hospitals, as well as the loosening of national health insurance regulations that will take effect in the second half of 2016,” said Andy Ho, managing director of VOF.

Just two months ago, the local medical market witnessed another major acquisition when asset fund manager SAM acquired a 15 per cent stake in Ho Chi Minh City-based medicine distributor My Chau Investment Corp.

This deal, the value of which remains undisclosed, was part of the pharmacy chain’s plan to expand operations and overhaul its governance. The two parties intend to develop an online pharmacy service.

Recently, the equitisation of state-owned Nam Thang Long Transport hospital has increased interest among investors, especially as the Ministry of Transport’s (MoT) equitisation plan for the healthcare facility proposes that the state should not hold a controlling stake.

With the list of potential investors growing longer, the bidding race looks set to be hotly contested. A new entrant in the bidding is Hanoi University of Business and Technology (HUBT), which has total assets of VND1.5 trillion ($68.8 million). It has submitted a series of commitments to the MoT, including a ten year non-transfer of stake agreement, and safeguarding employment for all the hospital staff, with incomes increasing 10-13 per cent annually.

Four other candidates that have thrown their hat into the ring are North South Petroleum Joint Stock Company, Lac Viet Group, Petro Invest., JSC, and Thi Son Production and Construction Company Limited.

Vu Anh Minh, head of the MoT’s Department for Enterprise Management, told VIR “With the state’s holdings proposed at 30 per cent, the equitisation of Nam Thang Long Transport hospital is expected to attract foreign investors once it is approved.

Nam Thang Long is the second medical transport facility to be equitised. In 2015, the local medical market heated up following the equitisation of the Central Transport hospital. A number of domestic and foreign investors, including real estate developers Vingroup and FLC, as well as Brookline Medical and a Malaysian partner joined the race.

However, the strict requirements, including a large equity, thinned out the number of competitors, with T&T Group finally winning the sole strategic partnership position.

A senior official at the MoT said that the selection of strategic investors for Nam Thang Long Transport hospital would not be the same as that for the Central Transport hospital.