Jakarta, Indonesia - November 24, 2023: Siloam Hospital Tower.
Luxembourg-based private equity firm, CVC Capital Partners, has agreed to buy an additional 45% stake in Indonesian-listed Siloam Hospitals from billionaire Mochtar Riady’s cash-strapped Lippo Karawaci for 16.6 trillion rupiah ($1 billion).
The transaction will boost CVC interest in Siloam Hospitals to 55.4%, ending Riady’s control of the healthcare company he helped develop in the past three decades. In May, Lippo Karawaci sold an initial 10.4% stake in the hospital chain to CVC for $240 million, enabling the indebted Indonesian real estate company to pay off some debts.
Despite the recent debt redemptions, Fitch Ratings said Lippo Karawaci still faces liquidity shortfall, necessitating further divestment of its interest in Siloam Hospitals. After the latest sale, Lippo Karawaci’s stake in the hospital operator will be reduced to about 19.4%.
“Fitch expects Lippo Karawaci to have a neutral to marginally positive free cash flow in the medium term, thus debt servicing will erode cash reserves unless Lippo Karawaci is able to tap further external financing,” Fitch said in a note last month.
As one of Indonesia's largest healthcare companies, Siloam Hospitals manages and operates 15 hospitals in the greater Jakarta region, as well as 26 other facilities across Indonesia.
Riady—the founder of the diversified Lippo Group—has a net worth of $1.6 billion that he shares with his family, according to Forbes' real-time data. The Lippo Group is now led by his sons, James and Stephen.Today, the group's businesses extend beyond healthcare and real estate. It also has interests in retail, media, and education.
