Embattled Euromedica, which runs hospitals, clinics and small diagnostic units across much of Greece has hired UBS to raise €100m to bolster its balance sheet. Will it get the money and what are its prospects? There is speculation that a private equity player will buy the entire €100m stake.

On the face of it, Euromedica is in a poor position. Unlike the three other big quoted Greek hospital groups, Euromedica lacks hospitals in Athens. Instead, it has a chain of smaller facilities across Greece often doing unglamorous, low margin treatment for the national health service. Debt is high at €360m - sales should come to €256m in 2009 with the company forecasting EBITDA of €47.5m.

But Greek analysts see an upside. They point out that if Euromedica raises the money and sells its 10% equity stake in Iaso it should be able to reduce debt to €200m. And they say that not being in Athens is an advantage today. One said: “Private hospitals in Athens are suffering from a price war, particularly in the high margin maternity area. Euromedica is isolated from this and the National Health Service needs its bed capacity.”

They also like its strong presence in diagnostics, where Euromedica has small facilities dotting the country. Margins in Greek lab diagnostics are high. German operators say small, unsophisticated labs can achieve 30-35% - nearly double the profitability achieved by big German labs offering hundreds of tests.