MPPHI Gets Funding, Delays IPO | Marvin Germo

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MPPHI Gets Funding, Delays IPO

By: Marvin Germo | October 16, 2019

MPPHI Postpones IPO

Metro Pacific Hospital Holdings, Inc. (MPPHI) delayed its p83.3-billion initial public offering that’s supposed to be the biggest listing in the Philippine Stock Exchange so far. The offering was postponed indefinitely from its initial date scheduled in the early fourth quarter this year. This is because a big company invested about P35.5 billion into MPPHI. Did you get excited about this IPO? You are not alone! Since we may not be able to invest in this company yet, let’s feed our minds with some of the essential parts of this news.

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Agreement With KKR

Metro Pacific Investments Corporation (MPIC) disclosed that it inked certain definitive agreements for MPPHI and Kohlberg Kravis Roberts & Co. (KKR)—the firm leading a consortium based on the United States. Arran Investments Pte. Ltd, an affiliate of the sovereign wealth fund of the government of Singapore GIC Private Ltd was with the meeting as well. MPIC believed that they have found the best way for MPPHI to go forward with the help of KKR. With this, the firm will hold for now the initial public offering for its hospital unit. MPIC then extended its gratitude to all the people involved in the agreement.

Transaction Of MPIC and KKR

What’s involved in the transaction of MPIC and KKR is the investment of consortium in new common shares of the hospital unit created by KKR subsidiary Buhay (SG) Investments Pte. Ltd. This is made through a share subscription agreement and exchangeable bonds that are mandatory and issued by MPIC as well. 41.37 million new common shares were sold by MPIC to KKR, equivalent to 2.74% of the resulting outstanding capital stock of the company and 6.25% of its aggregate par value. This is worth P5.2 billion.

Use Of Proceeds

MPIC said that the proceeds from this transaction will go to opening additional hospitals and new healthcare businesses with the MPPHI brand. This is in addition to expanding its current associates, subsidiaries, and joint ventures. The consortium bought an equivalent P30.1-billion mandatorily exchangeable bonds and these may be traded for 239.93 million common shares within a 10-year time or upon listing of MPPHI, whichever comes earlier. From this transaction, the proceeds will be utilized to reduce the bank borrowings of MPIC. Now that we have an idea why MPIC postponed its IPO for MPPHI, let’s wait for further announcements as the offering may take a while before being successfully offered. Time to focus on other IPOs this year!

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