OUE Lippo Healthcare, the unit of OUE Ltd, said it would raise S$78.75 million through a proposed placement of 562.5 million shares to Japanese trading firm ITOCHU Corp.
ITOCHU, through its indirect wholly-owned subsidiary Browny Healthcare Pte Ltd, will acquire the new shares at an issue price of S$0.14, the company said in a regulatory filing on Wednesday.
The placement, when completed, will see ITOCHU becoming a strategic investor with a 25.3 percent stake in OUE Lippo Healthcare.
"Taking a stake in OUE Lippo Healthcare allows ITOCHU to partner with the Lippo Group to gain a strategic foothold in this growing sector," Masahiro Okafuji, President and Chief Executive Officer of ITOCHU said in a statement.
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ITOCHU is one of diversified trading companies, with a market capital of over US$30 billion, and intends to diversify into the growing healthcare market in Asia by taking a strategic stake in OUE Lippo Healthcare.
Proceeds from the placement will strengthen the financial position of OUE Lippo Healthcare and put it in good stead to execute its business plans, the company said.
Completion of the placement is conditional upon, amongst others, approval from SGX-ST and is expected to occur on or before February 10.
Shares in the company surged 21 percent to S$0.15 on the Singapore Exchange. The stock has gained 165 percent in an year.
