KKR, GIC complete investment in Metro Pacific hospital unit

METRO PACIFIC Investments Corp. (MPIC) has completed the deal for the P35.3-billion investment by United States-based Kohlberg Kravis Roberts & Co. (KKR) and Singapore fund GIC Private Ltd. in its hospital unit.

In a disclosure to the stock exchange Monday, the listed conglomerate said the foreign investors have successfully closed the financial deal to acquire shares in Metro Pacific Hospital Holdings, Inc. (MPHHI) and mandatorily exchangeable bonds in MPIC.

KKR made the investment through its $9.3-billion Asian Fund III, which is targeted for investments in private equity transactions in Asia Pacific.

The development follows MPIC’s announcement in October that it was selling P5.2 billion worth of 41.37 million new common shares in MPHHI and P30.1 billion mandatorily exchangeable bonds in MPIC.

At the time, MPIC said once the transaction is completed, its stake in MPHHI would be reduced to 20% or 132.59 million common shares on a fully-diluted basis.

The entry of foreign investors resulted in the postponement of MPHHI’s planned P83.3-billion IPO (initial public offering) this year, which would have raised P5.95 billion in net proceeds from the primary offer and P75.1 billion in net proceeds from the secondary offer.

The cash generated from investments by KRR and GIC will be used to fund MPHHI’s expansion as it seeks to grow its hospital portfolio, subsidiaries, associates and joint ventures.

“Today marks the start of a new and exciting chapter for Metro Pacific Hospitals,” MPIC and MPHHI Chairman Manuel V. Pangilinan was quoted as saying in Monday’s statement.

“We welcome KKR and GIC as investors who not only have established track records of helping health care companies to meet their growth ambitions, but also have full confidence in Metro Pacific Hospitals’ potential to provide even more critical health care services to patients across the Philippines.”

MPHHI prides itself as the operator of the country’s largest private hospitals and health care network in bed capacity and revenues. Among the 14 hospitals in its portfolio are Manila Doctors Hospital, Asian Hospital and Medical Center, Makati Medical Center, Cardinal Santos Medical Center and Davao Doctors Hospital.

MPHHI also operates a number of cancer care centers, clinics, laboratories and medical schools across the country.

“The Philippine health care industry is poised for tremendous growth… With this new investment… we will be in an even stronger position to meet patients’ needs and capture new opportunities through organic expansion, acquisitions and investments, and the adoption of new technologies,” MPHHI President and Chief Executive Officer Augusto P. Palisoc, Jr. said.

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group.

Shares in MPIC at the stock exchange slipped 0.12 points or 3.28% to P3.54 each on Monday. — Denise A. Valdez