A healthy investment
About Columbia China
Columbia China is a privately-held, Shanghai-based healthcare company serving the growing needs for world-class medical facilities across China with single and multi-specialty hospitals, rehabilitation facilities and clinics. A 50:50 joint venture between Columbia Pacific Management Inc., an international healthcare business based in the US, and Temasek Holdings, Columbia China is dedicated to offering patients high quality, personalized care in a clean, modern environment with access to highly trained doctors and advanced medical technologies.
Columbia China was set up in 2011 with Kaijian Nursing Home established in the districts of Pudong and Xuhui in Shanghai. Other facilities are currently under development in the cities of Shanghai, Wuxi, Jiaxing, Changzhou and Ningbo, including general hospitals offering a one-stop solution for comprehensive medical and healthcare services.
The long way to transfer
With its operations and growth gaining momentum, Columbia China's began to focus on site expansion and procurement of high-end equipment and other needs. As the company intended to invest in another three hospitals in Wuxi, Jiaxing and Changzhou and put them into operation by 2018, massive and efficiently deployable funds are available.
However, the company has been troubled by the low efficiency of overseas financing in the Chinese market. Although, as a joint venture of two asset-rich groups, Columbia China itself has no shortage of funds for investment, foreign exchange policies and regulations made the channeling of these funds into China a challenge.
Essentially, documents for authorization had to be physically couriered to and from the US and thereafter submitted to the State Administration of Foreign Exchange (SAFE) for review and approval before a foreign debt account could be opened and the funds transferred. The whole process could take up to one month, and applied to each and every fund transfer.
Clearly, Columbia China needed a partner bank that could help them traverse this tedious procedure more smoothly and quickly.
A pool of opportunities
After consulting several banks, Columbia China finally chose to collaborate with DBS. Not only for a thorough understanding of the relevant regulations and terms, but also for being well versed in the procedures of structuring capital pools.
DBS set up a dedicated service task force to work on the best solution for Columbia China. In studying the problem, the team realized that SAFE launched a pilot program in 2014 to formally allow multinationals in the Shanghai FTZ to carry out centralized operation and management of their foreign exchange funds. In another words, eligible enterprises and financial institutions could carry out offshore financing activities independently, thereby expanding the scale of and the channels from which enterprises and financial institutions could obtain offshore financing.
Collaborating among the many divisions within the bank, DBS put in place a cross-border capital pool in the Shanghai FTZ. With this capital pool successfully built, the time taken for fund reallocation and transfers was decreased significantly. Instead of up to a month, it now only took three working days. And if the funds came from Singapore it would only take two hours.
The result of capital gains
By setting up a host company for Columbia China in the FTZ, DBS created a link and a bridge for overseas funds to be transferred directly to the company and its subsidiaries. This gave Columbia China a huge advantage over its past practices, and finally allowed the company to fully grab hold of new opportunities that might open up in the China market.
"DBS' cross-border cash pooling solutions provided us with flexibility and controllability in arranging for funds, which also put us in a better position to seize market opportunities."
Joseph Wong, Vice President, Finance, Columbia China
Discover a spectrum of opportunities
Explore DBS Treasury Prism to discover how you can create a similar cash management solution for your business. If you'd like to read more case studies, simply click on Case Studies on the left.
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