GIC, KKR buy Philippine hospital chain stake

MANILA • Philippine company Metro Pacific Investments Corp said yesterday that it is selling a 42.5 per cent stake in the country's largest hospital chain for 35.3 billion pesos (S$937 million) to a consortium comprising private equity firm KKR & Co and an affiliate of Singapore's sovereign wealth fund GIC.

GIC will restructure its current investment in Metro Pacific Hospital Holdings (Metro Pacific Hospitals) and will reinvest alongside KKR.

Metro Pacific also said it was postponing a previously flagged US$1.6 billion (S$2.2 billion) initial public offering (IPO) for Metro Pacific Hospitals, which operates 14 hospitals, many of which are among the largest and most modern in the Philippines.

The sale to the KKR-led consortium, which values the whole unit at 83 billion pesos, had attracted interest from buyout firms due to strong healthcare spending in South-east Asia.

The cash infusion will enable the company to hit its target of growing its network to 30 hospitals with 5,000 beds before 2030, said the healthcare group's president, Mr Augusto Palisoc, in a statement.

Under the deal, the KKR-led consortium will acquire 5.2 billion pesos worth of shares in the hospital business. It will also invest a sum of 30.1 billion pesos for convertible bonds that will be swopped for Metro Pacific's hospital shares in the next decade.

Metro Pacific said it expects to close the deal by the end of the year.

The company had earlier pursued a dual-track process to reduce its holding in the hospital chain and raise cash for debt payments. It announced plans to sell a minority stake in August, followed by a September filing to conduct an IPO worth up to US$1.6 billion.

Reuters reported last month that KKR was among the suitors which had advanced to the second round of the bidding process.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 16, 2019, with the headline 'GIC, KKR buy Philippine hospital chain stake'. Print Edition | Subscribe