A US$1.6bn (€1.5bn) initial public offering by the largest healthcare operator in the Philippine has been postponed following an investment by Singapore’s GIC and KKR.
Singapore’s sovereign wealth fund has backed the KKR Asian Fund III fund, in a deal worth a total of P35.3bn (€620m) to buy into Metro Pacific Hospital Holdings.
In the first tranche of a two-part agreement with Metro Pacific Investment Corporation (MPIC), which controls the hospital operation, KKR and GIC have agreed to subscribe P5.2bn worth of shares, giving them a 6.25% stake in the hospital chain.
The partners have also agreed to take up a bond issued by MPIC for P30.1bn. The bond will eventually convert to almost 240m shares in Metro Pacific Hospitals “on the sooner of 10 years or an initial public offering”.
Together, the two transactions will deliver a 42.5% stake in the hospital chain to the KKR-led consortium.
GIC, an existing investor in Metro Pacific Hospitals, would restructure its current investment in the company and re-invest alongside KKR, said the KKR statement.
Ashish Shastry, co-head of Asia-Pacific private equity and head of Southeast Asia at KKR, said: “Metro Pacific Hospitals exemplifies the type of high-calibre company KKR looks to work with.
”We are thrilled to play a role in the development of Philippines’ healthcare infrastructure.”
MPHH, which has interests in 14 hospitals with approximately 3,200 beds across the Philippines, will use the capital to pay down debt and expand its operations.
Augusto P Palisoc Jr, president & CEO of Metro Pacific Hospitals, said the cash infusion from the KKR-led consortium would enable his group to meet its expansion target of adding 5,000 beds and 30 hospitals before 2030.
“We also look forward to accessing the various healthcare companies in KKR’s global portfolio, to bring over new technologies and processes to improve healthcare services in our country.”
KKR is already an investor in Voyager Innovations, a digital technology company of MPIC’s sister company, PLDT, the largest telecommunications company in the Philippines.
Jose Ma K Lim, president and CEO of MPIC, 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.”