Georgia Healthcare Group

completed

Established as an independent insurance provider under the brand name Aldagi in 1990 and grown through a series of mergers and acquisitions, Tbilisi-based Georgian Healthcare Group (“GHG” or the “sponsor” - ghg.com.ge ) is a subsidiary of Georgia Healthcare Group Holding PLC (“GHG Holding”). The holding is owned by Bank of Georgia Holdings (“BoG”), 65 percent, and shares, 35 percent, traded in the London Stock Exchange since November 2015. GHG comprises of two companies, both market leaders in their respective sectors in Georgia: i) JSC Medical Corporation EVEX (“Evex” or the “Company”), the health services company; and ii) Imedi L Medical Insurance, a health insurance products provider company.Evex owns and operates 19 community hospitals in Georgia, providing primary out and inpatient healthcare services and 16 referral hospitals, providing secondary and tertiary level healthcare services. Two referral hospitals are specialty hospitals (one dedicated to pediatric and the other to plastic and reconstructive surgery), and 10 ambulatory clinics for primary outpatient healthcare services. All are located in Tbilisi and major regional cities and towns across the six regions of Georgia and covering about 27 percent (around 2,700) of total hospital beds in the country.IFC is considering to invest a $ 25 million A-loan’ to fund the expansion of Evex healthcare services. The proceeds of the loan provided by IFC shall be used for corporate finance needs related to the expected investment plan (the “project”) which includes: i) renovation of two recently acquired referral hospitals (DKC with 310 and Sunstone with 332 bed capacity respectively) located in Tbilisi; ii) finance the expansion plan of ambulatory clinics that includes 12 large ambulatory clinics, 15 small clinics in Tbilisi and towns across the country, and a diagnostic laboratory in Tbilisi; iii) potential acquisition of another referral hospital; iv) introduction of new services in existing hospitals (i.e., diagnostic center, critical services, pediatric cardiac departments, oncology center, etc.), regular maintenance capex, and investment in software solutions (IT systems); and v) acquisition of minority interests in its subsidiaries.Sunstone Referral Hospital, which is a long-established general hospital in Tbilisi, was acquired by the company in 2014. The hospital, covering a surface area of 25,000 square meters, is currently under substantial renovation works to increase the number of operational beds from 152 to 332. Renovations are expected to be completed and the hospital fully operational in 2017.DKC Referral Hospital, which is a long-established general hospital in a premium location of Tbilisi was acquired by the company in 2015. It is located in North-East Tbilisi and occupies a total area of 24,000 square meters. The hospital is only partially operated by the company today, whiles its significant part is leased to and operated by third party physicians. The company is terminating all lease agreements as per the relevant lease agreements and is undertaking substantial capital renovations to entire facility, after which it will in-house a wide range of pediatric and adult outpatient and inpatient services. After the completion of full renovation in 2017, the number of current 80 operational beds will be increased to about 310.Further expansion plans also include investments in a diagnostic lab, and opening of 12 large ambulatory clinics and 15 small express clinics in 2016 and 2017. The introduction of new services is at early planning stage and the company has not identified future acquisition and investment targets as yet.