Suomen Terveystalo, the largest Finnish private healthcare group, is to raise up to €30m through a 2 for 5 rights issue. Half the money will go to pay off debts.

ST hit problems last year, after acquiring Medivire, the leader in occupational healthcare, and all but doubling in size. This led to a pre-tax loss of €4.1m and a big rationalisation programme. The shares have dropped from €2.5 to €1.1 in a year.

The two largest shareholders pension funds, Varma and Ilmarinen, will subscribe, and have underwritten a further 9m shares, so ST can be sure of getting at least €15m.

Chief Executive Martti Kiuru says this is going well, and should yield annual savings of €3m-€5m, "mainly achievable in 2008". Some 100 people will eventually be axed.

"As well as Medivire, we had made 100 acquisitions since 2001, and these had not been integrated. In many towns and cities we have 2-3 facilities, so we are merging them into a single building," he explained.

Kiuru remains optimistic about the private sector: "Our organic growth rate should exceed the 12% we managed last year, and we should be significantly more profitable."

He is optimistic that the Finnish private healthcare market will continue to roar away: "In the mid 90s, private healthcare was 10% of a €5bn total healthcare market. Today it is 20% of a market worth €12bn-€13bn. I think that it should accelerate to reach almost 40% within ten years."

ST is particularly strong in occupational healthcare, where Kiuru expects the market to grow by 10-15% a year for the foreseeable future: "A lot of large companies who provided occupational healthcare are outsourcing that to the private sector, and so is the public sector in some municipalities."

He says that Finnish municipalities are starting to outsource primary care to the private sector, adding: "We already work for all five of the university hospitals in Finland, providing day surgery - orthopaedic, eye surgery and so on."