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Business deals

Itochu to pour $27m more into Lippo Group hospital operator

Japanese-Indonesian alliance to develop medical facilities in Asia

Lippo Group is one of Indonesia's biggest conglomerates, with a focus on real estate development.   © Reuters

TOKYO -- Japanese trading house Itochu is investing an additional 3 billion yen ($26.7 million) in a hospital operator under Indonesian conglomerate Lippo Group.

In February, Itochu spent 6.6 billion yen to buy into Singapore-based OUE Lippo Healthcare. It will inject more funds by purchasing a portion of new shares OUE Lippo plans to issue. Itochu's stake will remain unchanged at around 25%.

OUE Lippo plans to use the proceeds from the share issuance to buy about 10% of a real estate investment trust that targets Indonesian hospitals and other properties, as well as 40% of an asset management company, from a different Lippo group company.

The hospital operator considers REITs a potential stable income source. It also wants to sell Asian hospitals it develops jointly with Itochu to these trusts in order to fund new projects.

OUE Lippo agreed in June to develop a general hospital with state-owned China Merchants Group, and is involved in projects in other neighboring countries such as Myanmar and Vietnam.

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