Metro Pacific’s hospitals unit postpones IPO as KKR-led group invests P35.3B

Metro Pacific Hospital Holdings Inc. (MPHHI), a unit of conglomerate Metro Pacific Investments Corp. (MPIC), is getting a fresh capital infusion of P5.2 billion, plus P30.1 billion from a consortium led by KKR.

With the new capital, MPIC said it is postponing the plan for Metro Pacific Hospital to go public via initial public offering of up to P75.1 billion.

“After much consideration we believe we have found the best way forward for Metro Pacific Hospitals and MPIC with this new partnership with KKR. While we have decided for now to postpone the initial public offering for Metro Pacific Hospitals, I thank all the people involved in helping with this effort,” MPIC president and CEO Jose Ma. Lim said.

In a regulatory filing submitted by legal counsel Jane Catherine Rojo on Tuesday, MPIC said it has signed an agreement with KKR and Singapore’s sovereign wealth fund GIC covering an investment in common shares of Metro Pacific Hospital and exchangeable bonds issued by MPIC.

“Under the terms of the agreement, the KKR-led consortium will subscribe to P5.2 billion ($ 100.0 million) worth of 41,366,178 new common shares in MPHHI equivalent to 6.25% of the aggregate par value of the hospitals operator,” the filing read.

Proceeds from the sale of shares in Metro Pacific Hospital will be used to support “potential investments in additional hospitals and new healthcare businesses.”

The fresh capital will also be used to grow MPHHI’s existing subsidiaries, associates, and joint ventures, MPIC said.

“As part of MPIC’s wider financing arrangements, the KKR-led consortium will also invest in a P30.1 billion ($ 580.0 million) mandatorily exchangeable bond issued by MPIC,” it said.

“The exchangeable bond shall grant the KKR-led consortium the right to exchange the bond for 239,932,962 common shares in MPHHI sooner than 10 years or in an initial public offering, which may be considered after further development of the business,” it said.

MPIC said it plans to use the proceeds of the issuance to reduce its bank borrowings.

MPHHI 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’s 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. We also look forward to accessing KKR’s various healthcare companies in its global portfolio, to bring over new technologies and processes to improve healthcare services in our country,” MPHHI president and CEO Augusto Palisoc Jr. said.

The transactions still require the necessary corporate and regulatory approvals and third-party consents, approvals and confirmations, according to MPIC.

The transactions are expected to be completed by the end of 2019. —Ted Cordero/VDS, GMA News