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India equity firm, ADB invest in PHINMA Education

PHINMA Hall, the main building of Southwestern University PHINMA in Cebu. (Photo from Southwestern University PHINMA Facebook)

A private equity firm from India and the Asian Development Bank (ADB) are acquiring a minority stake in the company that owns and operates Southwestern University (SWU) PHINMA in Cebu and five other colleges and universities.

Kaizen Private Equity II Pte. Ltd. and ADB have signed an investment agreement with PHINMA Education Holdings, Inc. (PEHI) for the subscription of P1.625 billion worth of newly issued shares equivalent to a 20.28% equity in PEHI.

In a regulatory filing on April 12, 2019, PEHI parent PHINMA Corporation said it authorized the signing of the investment agreement.

The investment will entitle Kaizen and ADB to two of the 11 seats in PEHI’s Board of Directors.

PHINMA said it waived its rights to subscribe to new shares in PEHI in favor of the investors, but will remain the majority shareholder of the company with a 68.6% stake upon closing of the transaction by end-September 2019.

PEHI is PHINMA’s holding company for investments in educational institutions.

It owns, aside from SWU PHINMA, Araullo University (AU), Cagayan de Oro College (COC), University of Pangasinan, University of Iloilo, and St. Jude College.

It also has a 50% stake in PHINMA Saytanar Education Ltd. in Myanmar and recently signed a joint venture agreement with an Indonesian partner, PT Tripersada Global Manajemen, to form Ind-Phil Management Company.

As part of the conditions precedent of the transaction, Philippine Investment Management (PHINMA), Inc. will exchange its shares in AU and COC for a 9.06% stake in PEHI.

PHINMA took over SWU from the Aznar family in May 2015, after it acquired 56.83% of the school’s total outstanding capital stock for P1.9 billion. The school was founded by Don Matias H. Aznar in 1946.

PHINMA shares closed at P9.03 apiece on April 12, 2019. (Ventures Cebu)

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