Studio City plans to establish a private hospital focusing on imaging and diagnostic medical services

Melco Resorts & Entertainment (MLCO.US) announced plans to open a private hospital within the Studio City integrated resort in Macau, focusing on imaging and diagnostic medical services, with a total area of 12,618 square feet.

Melco's parent company, Melco International Development (00200.HK), stated in the announcement that it has signed an operating agreement with iRad Imaging and Diagnostic Medical Center. iRad Imaging is a related company of Melco's Chairman and CEO, Lawrence Ho. The initial operating period for the hospital is 10 years, effective from October 1 of this year; after the agreement expires, both parties can negotiate two extensions, each for five years.

Studio City Commercial will purchase and install several medical devices for iRad Imaging to operate on-site. iRad Imaging is required to pay Melco a basic fee: first, a base monthly fee starting at approximately MOP 695,000, covering rent and equipment usage fees; second, a revenue-sharing fee, which is payable if 1.5% of monthly revenue exceeds the base monthly fee; third, a management fee, which will be charged starting from the fourth year after the agreement takes effect. Upon expiration of the agreement, iRad Imaging has the right to purchase the aforementioned medical equipment at a "symbolic price."

This cooperation agreement is directly related to the ten-year gaming concession contracts signed by six gaming concessionaires in Macau in 2022. According to the contract requirements, starting from January 1, 2023, the six operators must collectively invest MOP 108.8 billion in the development of non-gaming projects