JAKARTA (TheInsiderStories) – Marubeni Corp., has acquired 5 percent of local hospital operator, PT Siloam International Hospitals Tbk (IDX: SILO), it said yesterday (02/26). The Japanese company and its parent PT Lippo Karawaci Tbk (IDX: LPKR) has formed a strategic partnership to expand into the Indonesian healthcare sector, pharmaceuticals, lab and other healthcare-related industries.
Since last year, the Riyadi’ company has seek various funding scheme to refinance its obligation to its lender. In January 2019, the developer has divested its $19.5 million, hospital and clinic in Myanmar to Singapore’ OUE Lippo Healthcare Ltd. The healthcare has been taken from another Lippo-owned company, PT Waluya Graha Loka.
Two unit of OUE Lippo, OUELH Healthcare Service Pte. Ltd., and OUELH healthcare Assets Pte. Ltd., has absorbed the hospital and clinic shares. “The transaction aims to increase company’s liquidity,” said VP director of Lippo Karawaci, Hendra Sidin, on Jan. 10, 2019.
Then, on February, 2019, the famiiy sold around 9.44 percent of Lippo Karawaci shares through PT Inti Anugerah Pratama. Currently, the Group owned 45.83 percent in its unit. In the following month, LPKR has secured funding around $1.01 billion to support the businesses and pay the debts, comprising of $730 million from right issue and $280 million from the completion of its asset divestment plans.
The developer said, the two fund managers, George Raymond Zage III and Chow Tai Fook Nominee Ltd., have signed an undertaking agreement to purchase rights and to subscribe the rights issue shares with a total commitment of $70 million.
The rights exercise price has been set by the company at Rp235 a share. The rights exercise price represents a discount of 8.2 percent to the last closing price of the company on March 11, 2019.
In June 2019, Lippo Karawaci released 47.82 billion shares or 67.74 percent of its issued and paid capital of the company with price is tagged at Rp235 per share. Its expecting the company would get Rp11.23 trillion for paying debt, paying company’ obligations, and increasing direct and indirect participation of subsidiaries.
Last January, the developer launched a five-year bond, valued at $325 million. The notes have a yield of 8.125 percent and the proceeds will be used to partially repay bonds maturing in 2022.
Now, the company is in the final stages of securing a facility to refinance the remaining $100 million in bonds upon which unit of Lippo Group and will have no debt maturities over the next five years until 2025.
Lippo Karawaci is facing Meikarta project’ problem over bribery issue. Its top official Billy Sindoro is arrested by anti-graft commission last year. In the third quarter of 2018, the property developer’ current assets decreased by 11.87 percent, while the equity was seen eroding by 9 percent to Rp27.14 trillion.
Based on the company’ financial report, Waluya Graha Loka business is trading, development, printing and services. The assets recorded at Rp153.15 billion in the third quarter of 2018.
Marubeni is a leading Japanese integrated trading and investment business conglomerate. In April 2019, Marubeni established the Next Generation Business Development Division with the mission of pursuing new business models that provide solutions to social issues, and increasing corporate value over the long term toward 2030.
While, Siloam was established in 1996 with more than 13,000 doctors and nurses, 36 hospitals and 7,557 beds across Indonesia. LPKR owns 51.05 of Siloam shares. Listed on the Indonesia Stock Exchange, the company now have a total assets of $4.0 billion at third quarter of 2019.
Currently, the company has a presence in 35 cities with 1,461 hectares of land bank ready for development. Through its two publicly listed subsidiaries, PT Lippo Cikarang Tbk (IDX: LPCK) and PT Gowa Makassar Tourism Development Tbk (IDX: GOWA), of which LPKR owns 81.0 percent and 62.7 percent respectively, LPKR develops and operates urban developments in Bekasi and Tanjung Bunga in Makassar.
LPKR also has an ownership stake in two listed REITs in Singapore, namely First Real Estate Investment Trust and Lippo Malls Indonesia Retail Trust with $1.0 billion and $ 1.4 billion of assets under management respectively as Sept. 30, 2019.
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