KKR invests R35 B in MPIC hospital
Metro Pacific Investments Corp. (MPIC) has postponed the planned initial public offering of Metro Pacific Hospitals Holdings Inc. (MPHHI) after a 135.3 billion capital infusion by global investment firm KKR that will dilute its shareholdings in the hospital unit to a minority.
In a disclosure to the Philippine Stock Exchange, MPIC President Jose Ma. K. Lim said "We have decided for now to postpone the initial public offering for Metro Pacific Hospitals.”
MPIC said the IPO “May be considered after further development of the business.” The conglomerate had initially planned to sell as much as 175 billion worth of MPHHI shares but the deal with KKR will reduce its stake to a minority 20 percent of MPHHI.
MPIC, KKR, and Singapore’s sovereign wealth fund GIC, signed certain definitive agreements under which KKR and an affiliate of GIC, will invest in MPHHI through a series of investments in common shares in MPHHI and in mandatorily exchangeable bonds issued by MPIC.
GIC will restructure its current investment in Metro Pacific Hospitals and will re-invest alongside KKR.
Under the terms of the agreement, the KKR-led consortium will subscribe to 41.27 million new MPHHI shares worth 15.2 billion for a 2.74 percent stake in the company.
Proceeds from the sale of shares in the company are expected to be used to support Metro Pacific Hospitals’ potential investments in additional hospitals and new healthcare businesses.
The new capital will also be used to grow the company’s existing subsidiaries, associates, and joint ventures.
As part of MPIC's wider financing arrangements, the KKR-led consortium will also invest P30.1 billion in mandatorily exchangeable bond issued by MPIC.
The exchangeable bond shall grant the KKR-led consortium the right to exchange the bond for 239.93 million MPHHI common shares, equivalent to a 15.88 percent stake, on the sooner of 10 years or an initial public offering.
MPIC plans to use the proceeds of this issuance to reduce its bank borrowings. The firm has been incurring debt to finance the huge capital expenditures of its infrastructure and utilities businesses.