NASSAU, BAHAMAS — Pending the approval of the Securities Commission of the Bahamas, the board of directors of Doctors Hospital has voted to issue 2,000,000 of its unissued and authorized common shares to a subsidiary of Fairfax Financial Holdings Limited of Toronto, Canada, (Fairfax) at a subscription price of B$6.75 per share.
Proceeds from the private placement (B$13.5 million) will be used to finance strategic growth, enabling Doctors Hospital to explore new service opportunities in the outpatient area and to augment the delivery of critically needed healthcare services outside of New Providence. The proceeds are not intended to supplement working capital requirements or to retire debt, both which are adequately covered with existing cash on hand.
Doctors Hospital Board Chairman Felix Stubbs announced that a unanimous resolution of the board of directors in January 2021 followed a period of due diligence, which included meeting with Chairman and Chief Executive Officer of Fairfax Prem Watsa, and determining the expectations that Fairfax had for the equity purchase.
“Fairfax is clearly impressed with the leadership, vision and future growth possibilities of Doctors Hospital,” Stubbs said.
“I was especially reassured by Fairfax’s application of its business and life values in this decision. Fairfax is investing in Bahamian leadership without expecting to be actively involved in the strategic or day-to-day operations of Doctors Hospital.”
A Doctors Hospital statement on the announcement also noted Fairfax does not intend to seek representation on the board of directors of Doctors Hospital.
Watsa said: “Fairfax is very impressed by Dr Charles Diggiss, Doctors Hospital’s president and single largest shareholder, and we are very excited about the possibilities emanating from Dr Diggiss’ vision. We admire his business acumen and we were impressed by his initiative to create synergies with the Cleveland Clinic.
“Fairfax’s formula for investing is making fair and friendly deals and, in this case, we seek to place the resources, influence and support of our global organization firmly behind Doctor’s Hospital’s vision as represented in its President Dr Charles Diggiss.”
Corporate Legal Counsel for Doctors Hospital Randol Dorsett revealed the issuance of this equity position in Doctors Hospital to Fairfax, which will constitute a 17 percent ownership interest, is being subjected to all regulatory scrutiny requirements and is proceeding diligently towards approval by the regulators.
Explaining the impact to Doctors Hospital’s long-term fiscal performance, Doctor’s Hospitals Chief Financial Officer Dennis Deveaux remarked: “The cash injection from this transaction presents a new source of debt-free funding which will provide for a robust expansion into service areas where there is clear under-capacity nationally.”
Dr Diggiss noted: “It is both humbling and reassuring that Bahamian corporate leadership still attracts foreign investor confidence and the resultant movement of capital into the Bahamas.
“Bahamian business growth extending beyond our national borders is not new, however, growth and expansion facilitated and supported by strong global partners and brands: that’s what creating the future Bahamas is about.
“The possibilities are defined by our courage, attention to our values and a focus on the long-term best interest of our patients and our business.”
Doctors Hospital said it has remained fiscally resilient throughout the COVID-19 pandemic, delivering critically-needed testing capacity and inpatient hospitalization for Bahamians.