PHP Agrees £700 Million UK Private Hospital Venture With GICNatasha Voase Primary Health properties Plc has formed a £700 million ($933 million) venture with GIC Pte, part of its ongoing plan to reduce debt levels following a merger last year. The UK healthcare landlord will seed the venture with 27 private hospitals, according to a statement Monday. As part of the deal, PHP will receive about £500 million, which will be used to repay the bridging loan it used to finance the takeover of rival Assura, and another debt facility.
This will reduce PHP’s net debt to about £2.9 billion. While Europe’s property markets continue to suffer in the face of high bond yields, infrastructure-like assets that have offer secure long-term income and can help hedge against inflation have been a relative bright spot. Demand for private healthcare in the UK has been increasing as pressure on public services grows, leading to lengthy delays for treatment."In addition to generating proceeds to reduce our borrowings, the transaction enhances returns on invested equity for our shareholders and brings a highly aligned capital partner to support investment in essential UK hospital infrastructure," said Mark Davies, Chief Executive Officer at PHP.
Last year, PHP outbid KKR & Co to buy Assura in a combination that created one of the UK’s largest publicly traded landlords. The listed real estate market has continued to shrink this year after Prologis Inc secured a deal to takeover the UK’s largest listed real estate company, Segro Plc. Rothschild & Co acted as financial adviser to PHP.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing