Rede Dor ll

completed

Founded in 1977 and based in Rio de Janeiro, Rede D''Or São Luiz S.A. ("Rede D''Or" or "the Company") is a for-profit healthcare provider with the largest network of private hospitals in Brazil. The company''s 23 hospitals, comprising 3,700 beds, and its 30 oncology clinics are located in the states of São Paulo, Rio de Janeiro, Pernambuco, and the Federal District (Brasilia). The IFC''s investment, which is a proposed loan of $50 million and the mobilization of up to $151 million in additional financing, is aimed at assisting Rede D''Or to increase the number of its beds by 1,900 by expanding the capacity of some of its existing hospitals or building new ones. In the period covered by the IFC''s investment, Rede D''Or plans to expand through 2-3 greenfield construction projects (in São Caetano, São Paulo, and at two locations in southern Rio de Janeiro city), and the company has major expansion plans for seven of its current hospitals. Expansion of Rede D''Or''s bed space through greenfield construction or adding wards to existing units involves the design, permitting, construction, and commissioning of this new capacity. In addition, the company is seeking to expand beyond the targeted 1,900 additional beds through acquisition of existing hospitals. The exact location of potential acquisition targets is not yet known; however, it is likely that they will be located outside of Rede''s current geography of hospitals. Based on a gap analysis conducted prior to acquisition and implemented intensively during the first years after any purchase, Rede D''Or will integrate these hospital operations into its own systems, including those that form its Environmental and Social Management System (ESMS), and bring them into conformity with the company''s standards. Based on recent experiences with acquisitions, this process involves Rede D''Or investments and upgrades in the building design, equipment, and personnel of the acquired hospitals. At the time of appraisal, Rede D''Or''s workforce consisted of 30,608 staff at its hospitals, clinics, research institute, and corporate offices. It has also hired third-party contractors for providing cleaning, catering services, unarmed site security, maintenance of certain types of equipment, and removal and disposal of hospital waste, including hazardous ones. Through the amalgamation of many back-office functions across the entire hospital group – such as appointment scheduling, IT, finance, and purchasing – Rede D''Or is seeking efficiency gains in its workforce through reassignments, consolidations, and organic attrition. For its greenfield construction and the expansion of existing units, Rede D''Or acts as its own general contractor but hires outside providers for specific architectural, engineering, and construction services.