Medilines Distributors Inc., distributor of imported medical equipment, is looking to raise P2.02 billion through an initial public offering.
Regulatory filings showed the company is looking to sell 825 million common shares, divided into an initial 550 million primary shares and another 275 million secondary shares owned by Virgilio B. Villar, covering by oversubscription option, at an offer price of up to P2.45 per share.
Prior to setting up Medilines, Villar served as the managing director of B. Braun Medical Supplies Inc. for over two decades. Medilines was incorporated in 2002.
PNB Capital and Investment Corp. will serve as issue manager, lead underwriter and bookrunner.
Medilines will use the proceeds of the share sale to finance its working capital to expand its product portfolio into the medical consumables segment and debt repayment.
About P541.5 million of the P1.35 billion proceeds from the primary shares sale will go to working capital to expand our product portfolio to include medical consumables – low-cost yet high-margin products that are regularly used for the medical equipments that Medilines itself sell.
The remaining P743.1 million will be used to retire the debts used to fund the company’s working capital requirements. Medilines has an outstanding debt of P573.7 million from Bank of the Philippines Islands, and another P169.4 million from Rizal Commercial Banking Corp.
“These loans carry interest rates of 4.5 percent to 5.25 percent. These loans were obtained to fund the company’s working capital requirements. We believe that pursuing this strategy will increase the overall shareholder value of the company as this will decrease our financing cost. We believe that we will still be able to access debt funding from our various relationship banks as the need arises,” the company said.
Medilines maintains a portfolio of high-end equipment from multinational medical device companies such as Siemens (Germany) for diagnostics imaging, B. Braun (Germany) for dialysis and Varian (USA) for cancer therapy. Its portfolio primarily caters to the categories of specialized medicine in the Philippines — diagnostic imaging, dialysis and cancer therapy.
