Private clinics in a major shake-up
Two of Athens’s leading maternity clinics, Lito and Mitera, will immediately proceed to a merger while listed hospital Hygeia improves its finances. The three hospitals are planning to expand in and out of Greece with the support of their strategic investors, Marfin and Dubai Financial. They first plan to create a gynecological and maternity clinic in the south of Athens. Market research is currently under way to find the appropriate building with 8,000-10,000 square meters for use. The Marfin group is also negotiating with another major private hospital in the capital. This goes against recent foreign press reports that said Andreas Vgenopoulos, Marfin’s vice president, is seeking a way out of the group’s non-banking investments, including hospitals, in order to create a major bank. «This is inaccurate, because, as we have already officially stated, the health sector is a strategic investment for us with a long-term prospect,» Vgenopoulos told Kathimerini. By the end of the year, Mitera and Lito will have merged, as the growth prospects created by the entry of Marfin and Dubai Finance has tamed competition between the two clinics. The merger will be made with an exchange of shares. Mitera owns 34 percent of Lito as the second-biggest stakeholder after Lito Holdings, the company set up by the clinic’s doctors. Lito Holdings owns 52 percent of Lito and also controls 5 percent of rival maternity clinic Iaso, with the rest of the shares spread among doctors. Iaso had tried to buy out or penetrate Lito before Mitera showed an interest in it. It is estimated that once the merger of Lito and Mitera is completed, Iaso’s stake will be minimized. At Iaso, efforts to find a strategic investor continue. Sources say that doctors, who own less than 20 percent of its share capital and belong to the management, are looking abroad for such interests. Euromedica’s efforts to find a strategic investor have been fruitless. Nevertheless, these efforts have bolstered its stock value since the start of the year. Investment funds Financial and investment groups are key to this consolidation process. In this context, with the sudden acquisition of 49 percent of Hygeia, the Marfin group has turned attention to the long-dormant private health sector, including Dubai Financial by selling 31.5 percent of its share capital to the Arab group. This is an investment scheme belonging to the Dubai Investment Group, which has a strong specialization in private health as well as growth plans in Greece and abroad. Meanwhile, British firm BC Partners has abandoned its effort to enter the Athens Medical Center as a strategic partner. Global Finance has also played a significant part in accelerating developments, if through the back door, through its unsuccessful effort to secretly acquire 51 percent of Mitera. This move brought the opposite result, as it led the management of Mitera to accept the proposal it had received, and initially rejected, from Marfin for cooperation and share exchange with neighboring Hygeia. Therefore the listed hospital acquired 24.84 percent of Mitera, starting a relationship based on the ensuing synergies for the two hospitals, and with their development into a major company as a prospect. Joint investments will be examined in Dubai, where there is an increased need for medical services and maternity clinics. This would be funded by Marfin and Dubai Finance. Hygeia and Mitera will maintain their autonomy until they merge, according to the agreement signed three months ago. In this context a four-member Cooperation Committee is created with two members from each hospital, and started by searching for possible synergies between the two hospitals. Hygeia is acquiring new directors and continues its rehabilitation program in order to reduce its borrowing, which has reached 135 million euros, including a 62-million-euro loan from Alpha Bank for the acquisition of the Mitera stake. As a result, a share capital rise and the issue of bonds will be proposed in Hygeia’s forthcoming general meeting. The size of the capital rise and the bonds will depend on Hygeia’s decision about its contract with the Association of Insurance Companies-Greece (EAEE), which expires on July 31. The hospital’s CEO, Paschalis Boohoris, said the contract the previous administration had signed with EAEE is responsible for the majority of debts to clients. «We are now examining the new terms that are essential for us to proceed to a new contract,» he said.
