JAKARTA (TheInsiderStories) — Global investment firm KKR and Singapore’ sovereign wealth fund, GIC, will invest PHP35.3 billion (US$683.58 million) in Metro Pacific Hospital Holdings, Inc. (MPH), through a series of investments in common shares and mandatorily exchangeable bonds issued by Metro Pacific Investments Corp., (PSE: MPI), said the company today (10/15).
While Jose Ma. K. Lim, president and CEO of MPI, said, “We have decided for now to postpone the initial public offering for Metro Pacific Hospitals. I believe the added dimension KKR brings will help transform the delivery of healthcare services in the Philippines.”
It said, the transactions are expected to complete by the end of 2019. KKR will make this investment from its Asian Fund III.
MPI owned by Indonesian tycoon Anthony Salim under First Pacific Co. Ltd., through Metro Pacific Holdings, Inc. MPI plans to use the proceeds of this issuance to reduce its bank borrowings.
GIC will restructure its current investment in MPH and will re-invest alongside KKR. Under the terms of the agreement, the KKR-led consortium will subscribe to Php5.2 billion worth of 41,366,178 new common shares in the company equivalent to 6.25 percent of the aggregate par value of the entity.
Proceeds from the sale of shares in MPI are expected to be used to support MPC’ potential investments in additional hospitals and new healthcare businesses. The capital will also be used to grow the company’ existing subsidiaries, associates, and joint ventures.
As part of MPI’ wider financing arrangements, the KKR-led consortium will also invest in a Php30.1 billion mandatorily exchangeable bond issued by the holding. The exchangeable bond shall grant the KKR-led consortium the right to exchange the bond for 239,932,962 common shares in MPH on the sooner of 10 years or an initial public offering, which may be considered after further development of the business.
Metro Pacific Hospitals is the operator of the largest private hospitals and healthcare network in the Philippines in terms of authorized bed capacity and revenue, with interests in 14 hospitals and approximately 3,200 beds across the country.
“KKR’ record of assisting transformational businesses is well known, and our plans for the future of Metro Pacific Hospitals are ambitious,” said Manuel V. Pangilinan, chairman of MPI and Metro Pacific Hospitals in a written statement.
Augusto Palisoc Jr., president & CEO of MPC added, “Its cash infusion into Metro Pacific Hospitals will enable us to further grow our network, on our way to our new target of 5,000 beds and 30 hospitals before 2030.”
He continued, the company also look forward to accessing KKR’ various healthcare companies in its global portfolio, to bring over new technologies and processes to improve healthcare services in our country.
Bank of America Merrill Lynch and UBS are acting as financial advisors to MPI and GIC. While, Milbank LLP and Picazo Buyco Tan Fider & Santos are acting as legal counsels to MPIC and GIC. Simpson Thacher & Bartlett LLP and Sycip Salazar Hernandez & Gatmaitan are acting as legal counsels to KKR.
by Linda Silaen, Email: email@example.com