GIC, KKR to invest US$680 million in Metro Pacific Hospitals via shares and bonds

Philippine 50-peso notesPhilippine 50-peso notes

Singapore state-owned investment company GIC and global investment firm KKR have entered a deal to invest as much as US$680 million in Metro Pacific Investments Corp.’s Metro Pacific Hospitals by acquiring shares and mandatorily exchangeable bonds, the parties said in a joint statement Tuesday.

Under the deal, the KKR-led consortium will subscribe for 5.2 billion Philippine pesos, or around US$100 million, of 41.37 million new shares in the hospital operator, representing a 6.25 percent stake, the statement said.

Metro Pacific Hospitals will use the proceeds for potential investments in additional hospitals and new healthcare businesses, as well as to expand existing subsidiaries, associates and joint ventures, the statement said.

Augusto P. Palisoc Jr., president and CEO of Metro Pacific Hospitals, said his company welcomed KKR’s investment.

“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,” Palisoc said in the statement. “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.”

Last month, Metro Pacific Hospitals had filed for an IPO, but Jose Ma. I. Lim, president and CEO of MPIC, said it would postpone a public offering for now, as involving KKR’s support would help change healthcare delivery.

KKR has a track record of supporting its healthcare investments with operational expertise and other resources from its portfolio companies, the statement said.

Exchangeable bond

In addition, the consortium will invest in a 30.1 billion peso, or around US$580 million, mandatorily exchangeable bond issued by Metro Pacific Investments Corp., or MPIC, the statement said. The bond is exchangeable for 239.93 million shares of Metro Pacific Hospitals in 10 years or in an initial public offering, whichever comes first, the statement said.

MPIC said it would use the funds to reduce its bank borrowings.

As part of the deal, GIC will restructure its existing holding in Metro Pacific Hospitals, the statement said. KKR will make its investment via its Asian Fund III, the statement said.

The deal is expected to be completed by end-2019, the statement said.

Metro Pacific Hospitals has interests in 14 hospitals, with around 3,200 beds, in the Philippines.

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