Gateway bond deal gets nod from Healthway shareholders
Private equity fund Gateway Partners emerged victorious at Healthway Medical Corp's extraordinary general meeting on Friday despite a flurry of questions from sceptical minority shareholders.
Backing from 95.2 per cent of voting investors means that Healthway - Singapore's largest clinic chain - is set to issue $60 million worth of convertible bonds to Gateway in exchange for cash and its financial survival.
The result was a damp squib to many who had expected major shareholder Lippo Group to vote against Gateway instead of alongside it, as it is believed to have done.
The Indonesian conglomerate is still struggling with a general offer to take control of Healthway.
Launched on Feb 7, the offer remains far from the 50 per cent ownership threshold it needs in order to turn unconditional.
If Gateway converts the $60 million bonds into shares worth 39 per cent of the enlarged Healthway, the resultant dilution could leave Lippo even further away from its goal.
Ultimately, Lippo seems to have voted on the basis that Healthway's cashflow problems are so dire and the operator's relationships with staff and suppliers so impaired that there really is no time for more tussling.
Besides, Gateway's funding deal - revised once after Lippo showed its hand - touts a much lower interest rate than initially tabled.
Minority shareholders were apprehensive.
A second resolution to approve the acquisition of Healthway Medical Enterprises passed with 98 per cent of votes in favour.
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