Metro Pacific Investments Corporation (MPIC), global investment firm KKR, and Singapore’s sovereign wealth fund GIC have signed definitive agreements under which KKR and an affiliate of GIC will invest in Metro Pacific Hospital Holdings.
Under the agreement, the firms will make a series of investments in common shares in Metro Pacific Hospitals as well as in the MPIC-issued exchangeable bonds.
GIC, which will restructure its current investment in Metro Pacific Hospitals, will re-invest alongside KKR.
The consortium led by KKR will subscribe to 41 million new common shares valued at a total of $100m in the company, which is equivalent to 6.25% of the total value of the company.
Proceeds from the divestment of shares are expected to be used to support Metro Pacific Hospitals’ plans for new hospitals and healthcare businesses.
Furthermore, the proceeds will be used to expand the hospital company’s existing subsidiaries, associates, and joint ventures.
MPIC and Metro Pacific Hospitals chairman Manuel V. Pangilinan said: “I am delighted that we are able to announce this new partnership in the healthcare sector, which is an extension of our successful relationship with KKR with its investment in Voyager Innovations, a digital technology company of MPIC’s sister company PLDT. KKR’s record of assisting transformational businesses is well known, and our plans for the future of Metro Pacific Hospitals are ambitious.”
The consortium will also invest in a $580m exchangeable bond issued by MPIC. This will enable the consortium to have the right to exchange the bond for 239 million common shares in Metro Pacific Hospitals in 10 years or an initial public offering, which may be considered after further development of the business.
MPIC plans to use the proceeds of this issuance to cut down its debt load.
Metro Pacific Hospitals is the operator of private hospitals and healthcare network in the Philippines. It has interests in 14 hospitals and around 3,200 beds across the country.
Metro Pacific Hospitals president and CEO Augusto P Palisoc Jr. said: “We welcome KKR as a new shareholder. 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. 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.”
MPIC president and CEO Jose Ma. K. Lim said: “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. I believe the added dimension KKR brings will help transform the delivery of healthcare services in the Philippines.”