Philippines-based Metro Pacific Investments (MPIC) has decided to sell 42.5 percent stake in the country’s largest hospital chain to a consortium led by private equity firm KKR for $684.5 million.
According to the deal, the KKR-led consortium, which also includes GIC- a sovereign wealth fund from Singapore, will subscribe to $100 million worth of 41, 366, 178 new common shares in the MPIC’s hospital business. The number of shares is equivalent to 6.25 percent of the company.
MPIC currently has an 85.6 percent stake in the business while GIC owns the rest. MPIC will use the funds from the stake sale to invest in new hospitals and healthcare businesses and also support its existing hospitals.
Besides buying a stake in the MPIC’s hospital business, the KKR-led consortium will also invest $583.7 million for convertible bonds issued by MPIC. This will give KKR the right to swap these bonds for 239,932,962 common shares in Metro Pacific Hospitals in the next 10 years or in the event of an IPO. According to reports, the funds from the bond issuance will be used by MPIC to reduce its debt.
Augusto P. Palisoc Jr., President, and CEO of Metro Pacific Hospitals told the media, “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 Philippines.”
MPIC recently announced that it has decided to postpone its plan to list Metro Pacific Hospital on the stock exchange.