Medi Lifestyle fails to meet profit guarantee on Malaysian healthcare services provider

Ashley Lo
1-min read

The cumulative ebitda of Lady Paradise for the profit target period stood at a loss of approximately RM2.7 million.

Medi Lifestyle Limited says the profit guarantee for Lady Paradise, a healthcare service provider in Malaysia, has not been met for the profit target period, according to an Oct 2 release.

Lady Paradise, previously known as HealthPro Life Sdn Bhd, was acquired by the group on Dec 18, 2019, through its wholly-owned subsidiary HealthPro Pte. Ltd..

Since its acquisition, HealthPro Pte. Ltd. has subsequently assigned the rights and obligations of the agreement  to HealthPro Group (M) Sdn. Bhd. (HealthPro Malaysia), a wholly owned subsidiary of the group.

According to the group, the cumulative ebitda of Lady Paradise for the profit target period stood at a loss of approximately RM2.7 million ($834,829.32). Under the agreement, the cumulative ebidta of Lady Paradise was guaranteed at no less than RM2.1 million.

This came on the back of interruptions of business activities during the Covid-19 pandemic and the suspension of expansion plans for new postpartum centres due to “unfavourable” business and market conditions.

Additionally, the group adds that there was also a “shift in the strategic direction of the group to focus on less capital-intensive businesses in view of the economic conditions”.

As a result, HealthPro Malaysia has since issued a formal notification letter to the sellers, demanding that the sellers make good the RM2.1 million shortfall in the profit target by way of cash payment within 14 days from the date of the notification.

Shares in Medi Lifestyle 5tn closed flat at 1.2 cents on Oct 2.

 

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