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Hermina garners Rp 600b in funds to support expansion
Private healthcare provider PT Medikaloka Hermina (Hermina) aims to expand its hospital network over the next few years after securing Rp 600 billion (US$45 million) in fresh funds from private equity firm Creador
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rivate healthcare provider PT Medikaloka Hermina (Hermina) aims to expand its hospital network over the next few years after securing Rp 600 billion (US$45 million) in fresh funds from private equity firm Creador.
Hermina, initially founded as a mother and child care hospital, announced on Wednesday that it had sold its minority shares to Creador in a move that would still allow it to exert strong control over its future operations.
With the move, its major shareholders remain the 13 doctors who established the firm, with lesser stakes held by Creador along with two other equity firms that earlier bought its shares.
Hermina’s president director Hasmoro said the newly-secured fund would help it add five hospitals a year until 2020 to the 25 hospitals it already operated across the country.
The additional hospitals may be acquired by building new ones or acquiring existing ones.
“Our vision is to have 40 hospitals by 2020 with 4,000 beds. I think this goal is achievable if we can attract more investors,” Hermina’s president director Hasmoro said at the Indonesia Stock Exchange (IDX).
Each hospital with 50 beds had an average investment cost of Rp 80 billion to Rp 100 billion, he added.
This year alone, Hermina has opened two new hospitals in Makassar, South Sulawesi and Balikpapan, East Kalimantan.
It plans to launch another three hospitals in the nation’s capital of Jakarta, Medan, North Sumatra and Purwokerto, Central Java toward the end of this year.
Hermina’s latest move is part of its attempt to open up its business to investors.
It is also eyeing an initial public offering (IPO) to collect an additional Rp 2.6 trillion in funds, most of which would be used to support its expansion plan.
“We don’t know yet when the IPO will be carried out. But hopefully, it will occur next year,” Hasmoro said.
The firm is currently finalizing the selection of IPO underwriters.
As many as 15 securities companies have joined the process and of the figure, three or four will act as underwriters.
Creador, which has invested around $100 million in the healthcare sectors of three countries including Indonesia, considered its investment in Hermina to be a strategic step, as it was confident about seeing significant growth in the hospital industry in the country in the future.
“We saw that the health sector has expanded by 10 percent on average for the last five years, about twice the rate of economic growth. Within this sector, Hermina has shown strong business growth,” Cyril Noerhadi, Creador senior managing director, told a press conference at the IDX.
The local healthcare market is appealing as the sector is still highly underserved. Only 12 beds are available per 10,000 people in comparison to a global average of 30 beds for the same number of people.
Furthermore, the industry is set to grow on the back of the government’s policy to implement a universal health coverage scheme.
