SMART COMM TO INFUSE P100 MILLION IN MAKATI MEDICAL CENTER
MANILA, July 28, 2005 (STAR) By Mary Ann Ll. Reyes - PLDT Group chairman Manuel Pangilinan has committed to infuse an initial P100 million into ailing Makati Medical Center using funds from Smart Communications, highly placed sources told The STAR yesterday.
Makati Medical Center, which named Pangilinan as its chairman recently, urgently needs at least P100 million to restore some order into its finances.
During the first five months of 2005, the hospital registered losses of P35 million while accumulated losses from 2002 to 2004 reached P300 million.
The same sources revealed that Pangilinanís group has no intention of acquiring a majority stake in Makati Med, but is coming in just to rehabilitate the ailing hospital.
It was learned that the PLDT Group has not yet decided which corporate vehicle will be utilized in the investments in Makati Med, but the funds will definitely come from Smart, PLDTís wireless subsidiary and consistent cash cow.
The P100 million will just be enough, however, to get things going for the medical institution. The sources said Pangilinan may opt to bring in additional funds later on to rehabilitate Makati Med.
In June, the hospital fired 295 employees, paying them P150 million in benefits. The downsizing is expected to save about P100 million each year.
Makati Med president Gabino Mendoza was earlier quoted as saying that the hospitalís recovery would depend on how soon the new investments would come in.
The hospital was reportedly in talks with six potential investors, including Pangilinan to bring in an initial P100 million, but it was the PLDT top man who finally said yes.
Makati Med will need another P200 to P400 million in new funds to refurbish the hospital and buy new equipment.
According to Mendoza, increased competition dragged down Makati Medís occupancy rate to 60 percent from about 80 percent three years ago, but sources within the medical community said the hospitalís resources were simply mismanaged.
Pangilinan admits that Makati Medís case would involve a lot of hard work, noting that the quantum of its new funds and the terms of its debt restructuring are both works-in-progress.
Sources said his decision to invest in the once premier hospital institution in the country was totally unexpected, especially since it has nothing to do with the core businesses of First Pacific Group which Pangilinan represents in the Philippines, namely telecommunications and real estate (Metro Pacific), and in Indonesia, food.
The PLDT group, through Smart, earlier acquired an interest in Meridian Telekom to beef up its presence in the wireless space. It has also indicated keen interest in acquiring a broadcasting company and has disclosed a possible joint venture with American direct-to-home satellite tv giant Echostar to offer DTH services in the Philippines.
The DTH business might not push through as scheduled this year, however, due to problems which Pangilinan said need to be addressed first.
Reported by: Sol Jose Vanzi
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