Infrastructure holding firm Metro Pacific Investments Corp. (MPIC) is in talks to take over the 200-bed Central Luzon Doctors Hospital (CLDH) in Tarlac City as part of its bid to operate the country’s biggest chain of major healthcare centers.
Industry sources said MPIC, led by businessman Manuel V. Pangilinan, was in discussions with the shareholders of CLDH led by the family of Constante Quirino on an acquisition deal that could potentially add a sixth hospital to the group’s network of medical centers across the country.
This interest in CLDH was confirmed by MPIC’s executive director for the hospital group, Augie Palisoc Jr. “We are looking at a number of hospitals across the country and Central Luzon Doctors is one of them,” Palisoc told the Inquirer in a recent interview.
Other sources said MPIC was now undertaking a due-diligence audit on the hospital.
Based on the private hospital’s audited financial statements filed with the Securities and Exchange Commission for the fiscal year ending June 2010, CLDH had a total asset base of P392.06 million and an equity of P325.66 million. The hospital itself is located at San Vicente, Tarlac City, but it has a school subsidiary—Central Luzon Doctors’ Hospital Educational Institution Inc. (CLDH-EI)—in San Pablo, Tarlac City.
CLDH was incorporated in 1962 by a group of doctors who saw the need for an alternative private healthcare provider in the province of Tarlac. The allied educational institution now known as CLDH-EI was set up in 1976, initially offering nursing education. The school is now offering undergraduate and graduate courses in nursing, allied health services—radiologic technology, medical technology, pharmacy, physical therapy, pulmonary therapy, midwifery, and health care services—and basic education (pre-school, elementary and high school), based on CLDH’s website.
The latest financial statements also showed that CLDH had incurred a net loss of P21.4 million in its fiscal year ending June 2010, widening from the net loss of P8.5 million a year ago.
Turnover amounted to P317.73 million out of which net hospital service income amounted to P200 million. The net loss was due to high cost of sales and services and other operating costs.
CLDH has an authorized capital base of P200 million consisting of two million shares, one million of which are preferred shares and one million common shares with a par value of P100 each. Subscribed capital consisted of 7,375 preferred shares and 9,947 common shares.
During the mid-1990s, when the original hospital buildings were no longer enough to accommodate the growing population and patients seeking healthcare from CLDH, the construction of a new three-story building complex was started to house most of the healthcare service units, clinical wards, operating room, pharmacy, chapel and administrative offices. But due to the effects of the 1997 Asian financial crisis, only two phases from the original three-phase plan were completed, according to the hospital’s website.
For its part, MPIC is investing more to expand its healthcare business, currently the smallest among its infrastructure portfolio, in order to hit the critical mass of 5,000 hospital beds and form the largest hospital chain in the country. For the next five years, the group expects to invest P3.5 billion for the acquisition of new hospitals.
The group has five hospitals in its portfolio with 1,600 beds as of end-June. It has 3,103 accredited doctors and 3,474 enrollees in allied educational institutions.