ASIAN Healthcare Specialists (AHS) said on Wednesday that it is partnering Temasek Holdings' Heliconia unit to pursue healthcare investments in South-east Asia. 

 

The two have formed a co-investment vehicle, Fansipan 2, for this purpose, with Heliconia taking a majority stake. Heliconia, through its Encyclia 1 Investments unit, will take a 76.2 per cent in Fansipan 2 for S$25.6 million. 

 

Meanwhile, AHS, through subsidiary Salvia Ventures, will subscribe for a 23.8 per cent stake for S$8 million. 

 

The total sum of S$33.6 million will serve as the first tranche of funding for any healthcare or healthcare-related investments in South-East Asia - as identified by Heliconia, after consulting with AHS. 

 

AHS said it will fund its investment in Fansipan 2 with a combination of proceeds from convertible bonds it intends to issue to Heliconia, the remainder of the net proceeds raised from its initial public offering of S$2.1 million and internal resources.

 

The group is proposing to issue a S$3 million convertible bond to Encyclia and a S$1 million convertible bond to Vanda 1 Investments (another Heliconia unit), both with zero coupon. 

 

The bonds will be converted into shares in AHS if Fansipan 2 undertakes a healthcare or healthcare-related investment of more than S$10 million, at S$0.1602 per conversion share. 

 

If fully converted, the shares represent about 5.48 per cent of the enlarged issued share capital of the company, essentially turning Heliconia into a substantial shareholder in AHS. 

 

AHS said: " The group views the Fansipan 2 investment as an opportunity to foray into an overseas market as a minority investor with a strong majority investment partner in Heliconia. The group&rsquo s participation in a co-investment vehicle with Heliconia...will enable it to gain valuable knowledge and insight for future investment opportunities."

 

In addition, if the bonds are converted and Heliconia becomes a substantial shareholder, it may lead to " increased visibility and profile of the company in the capital markets" .