Doctors Hospital is hoping to raise $13.5 million to fund strategic growth projects through the issuance of two million unissued shares to a Canada-based subsidiary of Fairfax Financial Holdings Limited.
The transaction is still awaiting regulatory approval by the Securities Commission of The Bahamas, a press statement issued yesterday revealed.
According to Doctors Hospital, the cash injection will not be used to retire debt or supplement working capital, as the company has adequate cash on hand to meet those needs.
“Proceeds from the private placement will be used to finance strategic growth, enabling Doctors Hospital to explore new service opportunities in the outpatient area, and to augment the delivery of critically needed healthcare services outside of New Providence,” the statement noted.
Doctors Hospital Chairman Felix Stubbs said in the statement that Fairfax is not seeking representation on the hospital’s board. Fairfax will, however, have a 17 percent ownership stake in Doctors Hospital.
“Fairfax is clearly impressed with the leadership, vision and future growth possibilities of Doctors Hospital,” said Stubbs.
“I was especially reassured by Fairfax’s application of its business and life values in this decision. Fairfax is investing in Bahamian
leadership without expecting to be actively involved in the strategic or day-to-day operations of Doctors Hospital.”
Doctors Hospital Chief Financial Officer Dennis Deveaux said in the statement that the share offering represents a “new source of debt free funding which will provide for a robust expansion into service areas where there is clear under-capacity nationally”.
He added that the hospital has been fiscally resilient throughout the COVID-19 pandemic.
Chairman and Chief Executive Officer of Fairfax Prem Watsa said his company is impressed by the direction Doctors Hospital’s President Dr. Charles Diggiss is taking the institution.
“We admire his business acumen and we were impressed by his initiative to create synergies with Cleveland Clinic,” said Watsa.
“Fairfax’s formula for investing is making fair and friendly deals and in this case, we seek to place the resources, influence and support of our global organization firmly behind Doctors Hospital’s vision as represented in its President Dr. Charles Diggiss.”
Dr. Diggiss lauded Doctors Hospital’s ability to attract the confidence of a foreign investor.
“Bahamian business growth extending beyond our national borders is not new; however, growth and expansion facilitated and supported by strong global partners and brands, that’s what creating the future Bahamas is about,” he said.
“The possibilities are defined by our courage, attention to our values and a focus on the long-term best interest of our patients and our business.”
According to the statement, when the shares are issued there will be a total of 11,971,634 listed common shares.