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Metro Pacific expects to finalize new hospital acquisition soon

Posted on April 10, 2013 10:05:36 PM [ BusinessWorld Online ]
By Cliff Harvey C. Venzon, Reporter
METRO PACIFIC Investments Corp. (MPIC) expects to wrap up a deal within the month to acquire a controlling stake in a Quezon City-based hospital, a senior official of the conglomerate said on Tuesday.
“Actually, we are just waiting for the SEC (Securities and Exchange Commission) approval on the capital increase,” Augusto P. Palisoc, Jr., chief executive officer of MPIC’s Hospital Group, said in a telephone interview, referring to De Los Santos General Hospital, Inc. (DLSGHI).
“The capital increase will allow us to invest in the hospital,” he added.
“We should be able to complete the transaction by end of this month. Our target was mid-April; but to be realistic, I think we will finalize the deal by the end of this month.”
DLSGHI officials were not immediately available for comment.
MPIC in early-December 2012 told the Philippine Stock Exchange that it had signed an “investment agreement” with all shareholders of DLSGHI -- the corporate owner and operator of De Los Santos Medical Center (DLSMC). The agreement will “allow MPIC to participate in a P250-million capital-raising exercise for DLSGHI and give MPIC a 51% equity ownership in the expanded company,” the disclosure read.
“Out of that P250 million, Metro Pacific will subscribe around P200 million worth of shares. The fund-raising activity is structured in such a way that we will end up owning 51% stake,” said Mr. Palisoc, who had explained in December last year that fresh funds “will allow us to expand and rejuvenate the existing facility.”
DLSMC is a tertiary teaching and training hospital with capacity of 150 beds. The hospital is located along E. Rodriguez, Sr. Boulevard in Quezon City.
Once the deal is completed, DLSMC will become the seventh medical facility in MPIC’s growing chain of hospitals in the Philippines. The new acquisition will also bring MPIC’s total bed capacity to “approximately 2,000 beds,” MPIC had said.
MPIC currently has stake in six hospitals with total capacity of about 1,800 beds: Makati Medical Center, Cardinal Santos Medical Center, Our Lady of Lourdes Hospital and Asian Hospital, which are all located in Metro Manila; a well as Riverside Medical Center in Bacolod City and Davao Doctors Hospital in Davao City.
MPIC Chief Executive Officer Jose Ma. K. Lim told reporters last month that the firm has earmarked P3.5 billion this year for acquisition of four more hospitals with around 200-bed capacity each.
Asked for updates yesterday, Mr. Palisoc said: “We are still in talks with several.” He declined to elaborate, citing confidentiality.
MPIC’s net income grew by 23.8% to P9.692 billion last year from P7.829 billion in 2011, driven by higher earnings from its subsidiaries, according to its audited financial statement.
Its hospital business generated P722 million in core profits last year, up 29% from 2011, the company said in a statement last month.
Shares of the conglomerate gained five centavos or 0.89% to close at P5.65 apiece yesterday from P5.60 each last Monday.
MPIC is the local unit of Hong Kong-based First Pacific Co. Ltd., which in turn partly owns Philippine Long Distance Telephone Co. (PLDT).
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a minority stake in BusinessWorld.
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