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Sri Lankan government to divest majority shares of Lanka Hospitals Plc

Sri Lankan government to divest majority shares of Lanka Hospitals Plc

Lanka Hospitals PLC (LHC), a prominent leader in Sri Lanka’s private healthcare industry, offers a comprehensive range of primary, secondary, and tertiary healthcare services that adhere to international standards of quality. LHC boasts a dedicated and compassionate team of healthcare professionals who are committed to achieving positive patient outcomes, maintaining a tradition of setting benchmarks for patient care in the country since its establishment in 2002.
The hospital was commissioned in 2002 as a branch of Apollo Hospitals India. The hospital was taken over by Sri Lanka Insurance in 2006. In 2009, it was renamed as Lanka Hospitals after it ended a licensing and support services agreement with Apollo Hospitals. LHC continues to make significant investments in the continuous development of its team and the incorporation of state-of-the-art medical and clinical technology, thereby enhancing its capabilities and striving for excellence in healthcare.
As of October 2023, LHC boasts a market capitalization of approximately $ 75 million. It stands as a Tier 1 healthcare entity, known for its strong brand presence and expansive operational footprint. Further LHC Group recorded growth in profitability and the balance sheet in a year marked with significant challenges for the country and the industry. High levels of liquidity with strong cash positions serves as testimony to the Group’s disciplined approach to financial management as peers struggled with high levels of debt.
Consolidated Revenue increased by 7% to $ 33.4Mn during the year, as Hospital revenues increased by 19% cushioning a decrease of 18% in laboratory revenues as the demand for COVID-19 related tests declined. Growth in Hospital revenues was supported by a return to normal business as the pandemic waned with all centers of excellence recording growth in revenues. This was achieved against a backdrop of declining disposable incomes due to high inflation and an economic crisis that presented several challenges in management of critical resources. Hospital revenues accounted for 74% of Group revenue compared to 67% in the previous year as a result reflecting the decreased demand in Diagnostics.
The constraints faced by government hospitals, including bed shortages, limited ICU units, and restricted medical supplies, have spurred private healthcare institutions to take a leading role in expanding healthcare services, heralding a positive transformation in the healthcare landscape. Private hospitals are facilitating greater healthcare accessibility, reducing waiting times, and embracing state-of-the-art technology. This expansion optimizes the utilization of available resources, fostering employment opportunities and enriching community infrastructure.

OSL take:
The government of Sri Lanka’s programmed to restructure state owned enterprises (SOEs) has presented a host of new business/investment opportunities for foreign businesses/investors exploring opportunities in the country.
Given Sri Lanka’s target of becoming an emerging business destination in the South Asian region, the ongoing economic activities and the expansion in opportunities in key economic sectors including the health sector has become a hotspot for business opportunities. The opportunities in the health sector have further expanded with Sri Lanka’s tourism industry also promoting the country as a health and wellness tourism destination.
Given all these developments, the Sri Lankan government’s decision to divest majority shares of Lanka Hospitals PLC presents a lucrative business/investment opportunity for foreign businesses/investors.
It is in such a backdrop that Opportunity Sri Lanka (OSL) is looking at providing consultancy services to foreign businesses/investors looking at investing in Lanka Hospitals PLC.
OSL and its affiliated organizations have a significant track record of assisting both foreign and local entities in securing a wide range of contracts within Sri Lanka. Notably, some of OSL’s partners include globally renowned Fortune 500 companies. At any given time, their project pipeline, encompassing investments and tenders, exceeds a substantial one billion US dollars, making them a prominent player in the market. OSL boasts the most extensive inventory of business opportunities in Sri Lanka, setting them apart as the market leader in this regard. To facilitate business interactions in Sri Lanka, OSL has established opportunitysrilanka.com, a dedicated digital platform that serves as the exclusive hub for opportunity-related content, independent of advertisements or sponsorships. As part of their core business operations, OSL Global is actively seeking suitable investors and introducers to assist potential investors in utilizing OSL’s services to successfully navigate the bidding process. Importantly, OSL provides its comprehensive services without any upfront fees. Additionally, OSL is capable of introducing international firms with a local presence to carry out specific functions, such as buy-side due diligence, at their standard charge-out rates. To benefit clients of OSL, these services may be offered at a special discounted rate.

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Article Code : VBS/AT/20231116/Z_5

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