Metro Pacific's hospital unit cancels IPO plan, taps foreign investor instead

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The hospital arm of Manny Pangilinan's Metro Pacific Investments Corporation drops its plan to go public and instead chose to raise funds from foreign investors.

Metro Manila (CNN Philippines, October 15) — The hospital arm of the Metro Pacific Investments Corporation (MPIC) has shelved its plan to go public, opting instead to tap foreign investors to raise ₱35.3 billion.

In a disclosure on Tuesday, the Manny Pangilinan-led conglomerate announced that it has tapped global investment firm KKR and Singapore’s sovereign wealth fund GIC for fresh funding, dropping plans to secure capital for Metro Pacific Hospital Holdings, Inc. (MPHHI) through an initial public offering (IPO).

The amount is half the ₱75.1 billion it wanted to raise by going public later this year.

The listed parent company said it signed definitive deals with the two firms, who have agreed to buy common shares in Metro Pacific Hospitals, and in mandatorily exchangeable bonds issued by MPIC worth ₱30.1 billion.

Under the agreement, KKR will also subscribe to ₱5.2 billion worth of Metro Pacific Hospitals shares.

"Proceeds from the sale of shares in the Company are expected to be used to support Metro Pacific Hospitals’ potential investments in additional hospitals and new healthcare businesses. The capital

will also be used to grow the Company’s existing subsidiaries, associates, and joint

ventures," MPIC told the Philippine Stock Exchange.

KKR's bond holdings gives it the right to exchange the bonds for 239.9 million shares in Metro Pacific Hospitals within 10 years or when it finally goes public. MPIC said the money will be used to "reduce bank borrowings."

KKR has had previous investments with Pangilinan through Voyager Innovations, a digital technology firm of MPIC's sister company, PLDT.

MPHHI has a stake in 14 hospitals with around 3,200 beds nationwide. With the investment, its President and Chief Executive Officer Augusto Palisoc, Jr. said the cash infusion will help Metro Pacific Hospitals hit their goal of 30 hospitals and 5,000 beds by 2030.

MPHHI revealed plans to go public in September as it looked to raise ₱75.1 billion by listing on the local bourse come November. The company had wanted to sell up to 417,092,929 shares at ₱182 apiece, and to trade under the symbol "HOSP," but decided against the decision. Coconut exporter Axelum Resources Corporation and the Villar-led AllHome Corp. marked their respective debuts on the PSE last week. Axelum is currently trading below its ₱5 guidance price, while AllHome has been hovering near its ₱11.50 IPO price.

The hospital earlier said it will use ₱6 billion from the net proceeds for investments in additional hospitals, cancer centers, clinics and new healthcare businesses; additional investments in the group's existing hospitals to support their growth; and general corporate purposes.

"After much consideration we believe we have found the best way forward for Metro Pacific Hospitals and MPIC with this new partnership with KKR. While we have decided for now to postpone the initial public offering for Metro Pacific Hospitals, I thank all the people involved in helping with this effort," said MPIC President and CEO Jose Ma. Lim. "I believe the added dimension KKR brings will help transform the delivery of healthcare services in the Philippines."

The deals with KKR are expected to be completed by yearend.