MEAHCO announces SAR2/share DPS, BoD approves six MSA in the UAE and Pakistan
Middle East Healthcare Company (MEAHCO) (4009.SE), owner and operator of Saudi German Hospitals franchise, BoD proposed a DPS of SAR2 for FY16; implying a yield of 2.8% and a DPO of 51%. On another note, MEAHCO signed a SAR100mn loan with National Commercial Bank (1180.SE), with the purpose of financing the company’s working capital requirements. The loan term will be from March 2017 to July 2017, subject to annual renewal. Also, the BoD had approved the signing of six Management Supervision Agreements; whereby MEAHCO’s “Saudi German Hospital” franchise would be utilised in return of 10% of the before tax profits of the medical facilities under the agreement, which would imply no financial contribution from MEAHCO. Two of those hospitals will be in Sharjah and Ajman in the UAE, whereby MEAHCO will work by the MSA scheme. The remaining four hospitals signing the MSA agreement will be in Pakistan, where three are owned by Bait Al Batterjee Medical Company(which owns c55% of MEAHCO), and are located in Lahore, Islamabad and Karachi, while the fourth is owned by Bahria Town. The three hospitals owned by Bait Al Batterjee will follow the MSA 10% of before tax profit scheme, while MEAHCO will not receive any dues from the Bahria Town hospital. The medical facility in Sharjah will be a daycare central and is expected to commence operations in 2Q18, while Ajman 150-bed hospital is expected to commence in 3Q19; they are expected to breakeven in 2020 and 2021, respectively. The three hospitals owned by Bait Al Batterjee Medical Co. in Pakistan are under planning stage, while the Bahria Town Hospital in Lahore is nearing completion.
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