Krishna Institute of Medical Sciences Limited (KIMS) has announced that it has entered into a significant Operations and Management Agreement with Insignia Healthcare Private Limited. Under the agreement, KIMS will manage and operate a newly constructed super specialty hospital with a 150-bed capacity in Guntur, Andhra Pradesh, branded as “KIMS-SIKHARA.” The contract, effective from November 9, 2024, is initially set for 15 years with the possibility of a 10-year extension.
Key Details of the Agreement:
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- Scope: KIMS will oversee the complete operations and management of the hospital, ensuring efficient healthcare service delivery with its team of experienced medical professionals.
- Capacity: The hospital, currently at 150 beds, has the infrastructure to expand up to 200 beds.
- Revenue Model: KIMS will earn a 5% revenue fee based on the hospital’s net revenue (gross revenue minus discounts and disallowances).
- Asset-Light Expansion: This partnership aligns with KIMS’s asset-light expansion strategy, allowing the institution to broaden its footprint in Guntur under its established brand name.
- First Right of Refusal (ROFR): During the agreement period, KIMS will have ROFR on any transfer of equity shares in KIMS-SIKHARA. Additionally, KIMS holds an option to acquire up to 100% equity in KIMS-SIKHARA if it chooses to do so, subject to future agreements.
This collaboration represents a strategic move for KIMS to strengthen its presence in Andhra Pradesh by leveraging Insignia Healthcare’s infrastructure and expanding its healthcare services in the region.
