It will leverage a consortium consisting of Lumayan, Lumayan Active Life and Indigo Tenguh for this project.
However, UH Healthcare, via Indigo Teguh will fund RM33 million to Lumayan to purchase land in Johor, Malaysia for the development of part of the land into an active retirement home, and remaining parts of the land to be developed into a healthcare and wellness centre.
The plot of land will be located 21 kilometres south from the newly-opened Desaru Coast Ferry Terminal in Johor.
This will cost RM37 million, and RM4 million will be footed by Lee himself, while the remaining RM33 million is intended to be funded by the company’s internal resources and bank financing.
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LAL will hold 65% of theactive retirement home project, while Indigo Teguh will hold 35%. The health and wellness centeres will be 30% held by LAL, 55% by Indigo Teguh, and 15% by Lee himself.
In a release, UG Healthcare explained that this allows the company the opportunity to diversify its existing glove manufacturing and distribution business and be involved in the development, management, and operation of active retirement homes, as well as healthcare and wellness businesses.
It believes that there is increasing demand for good quality retirement facilities, as well as healthcare and wellness services, due to the trend of an ageing population across Asia and other regions.
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Moreover, it highlights the active eldercare and healthcare industry is a comparatively stable market and largely independent of cyclical business and market fluctuations.
The diversification of UG Healthcare into the new business is part of its strategy to “minimize risks from such fluctuations.”
With the new business, UG Healthcare expects this to provide additional and recurrent revenue streams.
It will venture into the business “prudently” by working with its strategic partners, with a view of enhancing shareholder value over the long-term and achieving long-term growth.
As the proposed new business is substantially different from the existing business and is envisaged to change the risk profile of UG Healthcare, this will be subject to the approval of shareholders at an extraordinary general meeting, which will be announced in due course.
Shares of UG Healthcare closed at 18 cents on Oct 14, 0.2 cent up or 1.13% higher than its previous close.
