Behind a Record $1.6 Billion Philippine IPO, a Plan to Tame Debt
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The hospital venture of a Philippine investment group delayed what would’ve been the nation’s biggest initial public offering and instead will raise 35.3 billion pesos ($685 million) by selling shares to KKR & Co. and Singapore sovereign wealth fund GIC Pte.
KKR and GIC will pay 5.2 billion pesos for a 2.7% stake in Metro Pacific Hospital Holdings Inc. and will also buy bonds worth 30.1 billion pesos, convertible into 239.93 million shares, according to a statement Tuesday. The deal will be completed by end-2019 and parent Metro Pacific Investments Corp.’s stake on a fully diluted basis will fall to 20% from 60%.
“After much consideration, we believe we have found the best way forward for Metro Pacific Hospitals and Metro Pacific with this new partnership,” Metro Pacific President Jose Ma. Lim said in the statement.
The planned IPO, for which the company had already hired underwriters including a clutch of global banks, was aiming to raise as much as $1.6 billion. Facing $4.7 billion of debt, the group also faces large outlays for its toll-road, power-generation and light-rail projects over the next three years.
Metro Pacific Hospital will use the 5.2-billion-peso investment to reach its target of 5,000 beds and 30 hospitals by 2030, President Augusto Palisoc said. The company now has 14 hospitals with 3,200 beds across the Philippines.
Shares of Metro Pacific Investments were unchanged as of 10:23 a.m. in Manila, after earlier rising as much as 2.6%.
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