EC HEALTHCARE plans to sell a 51% stake in New Medical Centre Holding Limited for HKD 437.6 million

According to the news from Zhitong Finance APP, EC HEALTHCARE (02138) announced that on November 6, 2024, the company's indirect wholly-owned subsidiary Jade Master International Limited, Ma Zhimian, and Hu Runqi plan to sell 51%, 48%, and 1% of the issued share capital of New Medical Centre Holding Limited to AIA Hong Kong Medical Services Limited, for approximately HKD 437.6 million, HKD 412 million, and HKD 8.58 million, respectively. In addition, according to the share purchase agreement, the company will facilitate UAIHL (the company's indirect wholly-owned subsidiary) and the other two shareholders of HKMAI TST (namely, Dr. Xu Qida and Dr. Cen Chenghui) to transfer a total of 49% of the issued shares of HKMAI TST to the target company. The target company will pay UAIHL, Dr. Xu Qida, and Dr. Cen Chenghui respective amounts of HKD 3.814 million, HKD 8.471 million, and HKD 8.471 million for the transfer of HKMAI TST. The seller will facilitate the target company to transfer 5.1% and 4.9% of the issued shares of HKMAI to UAIHL and the second seller, respectively. UAIHL and the second seller will each pay the target company a price of zero for the transfer of HKMAI. Upon completion of these HKMAI transfers, the group will no longer hold any shares in HKMAI TST, and the target company will no longer hold any shares in HKMAI. After the completion of the sale, the target group will include 100% of the issued shares of HKMAI TST, but will not include any HKMAI interests, and will no longer be a subsidiary of the company, with its financial performance no longer consolidated into the group's financial statements. Furthermore, the company and the target company have entered into a service agreement, under which the company agrees to provide services to HKMAI TST for three years after completion. On the same day, Dr. Xu Qida and Dr. Cen Chenghui entered into a purchase agreement with the target company, under which the target company conditionally agrees to acquire 20% and 20% of the issued share capital of HKMAI TST from Dr. Xu Qida and Dr. Cen Chenghui, subject to the terms and conditions contained therein. The total purchase price payable by the target company to Dr. Xu Qida and Dr. Cen Chenghui is HKD 16.942 million. After the completion of the acquisition and the HKMAI TST transfer, HKMAI TST will become a wholly-owned subsidiary of the target company. The announcement stated that the sale is consistent with its strategy to fully utilize and manage resources to better develop its asset portfolio. The sale allows the group to reallocate the proceeds when other investment opportunities arise and to adjust (if necessary) the overall strategy of its investment portfolio when market conditions permit. It is reported that HKMAI TST mainly engages in providing medical imaging services, including MRI, CT scans, 3D mammography, ultrasound scans, liver fibrosis scans, and X-ray examinations, and operates an imaging center in Tsim Sha Tsui, Hong Kong. The target company is a limited company registered under Hong Kong law, primarily engaged in investment holding. Its subsidiaries, The New Medical Centre Limited and New Medical Centre Imaging Limited, mainly provide medical services and medical diagnostic services, respectively