SG’s Fullerton Healthcare in talks to exit business, invites bids from investors

Fullerton Health IFC

Singapore-based Fullerton Healthcare Corporation is on the block and has initiated talks to sell up to 100 per cent stake in the company, DealStreetAsia has learnt.

This is contrary to the company’s earlier plans of divesting only a part of its stake. According to an earlier Bloomberg report, Fullerton Healthcare had roped in Bank of America as its sell-side advisor.

Currently, Singapore-based SIN Capital holds a majority stake – over 50% – in Fullerton Healthcare. Meanwhile, Ping An Capital, the equity investment arm of China’s Ping An Insurance Group, owns another 17 percent stake in it, while the remaining is held by individual investors and Fullerton Healthcare’s management.

Talks of a stake sale within the company had initially surfaced during the first quarter of last year, before the COVID-19 pandemic engulfed business activities across regions.

“The process was stalled due to the pandemic. During the early 2020 process, Fullerton Healthcare only planned to sell a minority stake. Now, they are looking to sell up to 100 per cent stake,” a source said on condition of anonymity.

Spokespersons of Fullerton Healthcare, SIN Capital and Ping An Group declined to comment on the development. 

While the exact valuation of the company’s stake could not be ascertained, an earlier DealStreetAsia report indicated Fullerton Healthcare’s enterprise value could be about $1.6 billion.

The fundraising process has been reinitiated as the company requires fresh capital to revamp its business.  

According to the source in the know of things, Fullerton Healthcare may have amassed a total of around S$200 million in debt, which includes two bonds guaranteed by Credit Guarantee and Investment Facility (CGIF) with a total of S$100 million of value, besides other loans.

The first CGIF-guaranteed bond is valued at S$50 million and will be due in July 2021 with 2.45 per cent interest rate. Meanwhile, the second bond is also valued at a similar amount and will be due in July 2023 with a 2.75 per cent interest rate.

Fullerton Healthcare’s stake sale process could also be associated with its financial obligation to Asian investment company RRJ Capital Management.

According to the source mentioned above, Fullerton Healthcare’s biggest debt instrument is RRJ Capital’s hybrid securities that are similar to perpetual bonds (a debt without maturity date). In this case, however, they are treated as equity on Fullerton Healthcare’s balance sheet.

When contacted, RRJ Capital CEO Alan Ngo declined to comment on the matter.

In 2020, Fullerton Healthcare registered growth and “that which makes them attractive for potential investors,” said a source. It achieved around S$145 million in EBITDA last year, an increase by almost 40 per cent from that of 2019, the source added.

The increase in EBITDA was primarily driven by its performance of its Philippines’ subsidiary Intellicare Group, that recorded growth in profit during the COVID-19 pandemic.

Intellicare Group’s business spans three companies: Asalus (engaged in the delivery of managed healthcare services), Avega (a provider of third-party administration (TPA) services), and Aventus (a chain of clinics).

Back home, Fullerton Healthcare also made headlines during the COVID times for working with the Singaporean government on tests being conducted on foreign workers and the country’s overall vaccination programme. Meanwhile, in Australia, the company tied up with the government for contact tracing and other activities –factors that helped improve its financials.

Early last year, when Fullerton Healthcare had initiated talks to sell its stake, we at DealStreetAsia had reported that firms such as Temasek Holdings’ subsidiary Sheares Healthcare, and global PE firms such as TPG and KKR had evinced interest.

“It is possible that the same names show their interest, but the company may attract more parties,” the source continued.

Fullerton Healthcare was founded in 2010 and operates a network of healthcare facilities across Singapore, Malaysia, Indonesia, and the Philippines in Southeast Asia. Besides, it is also present in Hong Kong, China, Australia and New Zealand.

In 2016, the company was slated to launch its IPO on the Singapore Exchange to raise around S$213 million ($149 million). But the process was affected after some anonymous letters, supposedly written by doctors, were then sent to the regulator raising issues about the way the company charged fees.

The IPO plan was subsequently called off and was attributed to poor market conditions. In mid-2018, the company was rumoured to be preparing for an IPO in the US, but the plan did not materialise.

The IPO plan is understood to be put on the backburner currently with talks of an impending stake sale gaining steam.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.