Saudi German Health inks 3 contracts with Al-Sobh New Medical

One of Saudi German Health's hospitals

Middle East Healthcare Co. (Saudi German Health) signed today, March 6, three contracts with Al-Sobh New Medical Co., according to a statement to Tadawul.

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The first contract permits the usage of Saudi German Hospital trademark and brand name at Al-Sobh New Medical Co.’s Sobhi Abdul Jalil Batterjee Hospital (a related party) in Al Rehab District, Jeddah.

This contract, which is valid for 10 years from the contract signing date until March 5, 2035, will have a positive impact on Saudi German Health for generating a stable revenue stream of 10% of the hospital's monthly net profit over 10 years, starting from the breakeven point. This is seen to enhance cash flows and profitability, entailing no risks to the company's profits or assets, while supporting improvement of the company's financial position.

The second contract, valued at SAR 3.14 million, entails Saudi German Health’s preparation, qualification, and supervision of the pre-opening phase of Al-Sobh New Medical’s Sobhi Abdul Jalil Batterjee Hospital. The deal, running for six months as of today, will have a positive impact, contributing SAR 3.14 million in revenue, which will boost its cash flow and help strengthen its financials.

Meanwhile, under the third contract, Saudi German Health will carry out the management and operation of Sobhi Abdul Jalil Batterjee Hospital, garnering 3% of the facility’s net revenues after deducting rejections. It runs for five years, starting from April 6, 2025.

This contract will positively impact the company, as it entails receiving 3% of the hospital's net revenue after deducting rejections, which will in turn improve cash flow, financial stability, and profitability over five years.

Sobhi Abdul Jalil Batterjee Hospital will consist of 70 outpatient clinics, covering all medical specialties, in addition to a patient admission department, radiology, laboratories, and all other supporting departments. According to the initial license from the Ministry of Health, the hospital's bed capacity is 200 beds, Saudi German Health said.

The company also noted that the related parties to the three contracts are the following: Sobhi Abdul Jalil Batterjee (Chairman), Makarem Sobhi Abdul Jalil Batterjee (Vice Chairman), Khaled Abdul Jalil Batterjee (Board Member) and Sultan Sobhi Abdul Jalil Batterjee (Board Member).