PRIVATE EQUITY | Cesar Tordesillas, Indonesia

Lippo luring private equity firms to Indonesia

Lippo Karawaci is drawing private equity firms on its possible sale of as much as 49 percent of its unit Siloam Hospitals.

The stake in Siloam is attracting early interest from Bain Capital, Blackstone and KKR, according to banking sources. Other private equity funds showing an interest in bidding include Carlyle Group and TPG Capital with its affiliate Northstar, the sources said.

The deal would value the firm at more than $1 billion.

Lippo Karawaci plans to sell a minimum of 20 percent of unit Siloam for between $200 million and $300 million, and has hired Bank of America Merrill Lynch.

Lippo could sell as much as 49 percent of Siloam, Indonesia's largest private healthcare operator, if the bids match its target valuation of over $1 billion, one of the sources said.

Private equity firms see a good opportunity to invest in the growing healthcare spending in Indonesia.

Indonesia has one of the world's lowest healthcare spending-to-GDP ratios, but its rising middle class - which represents more than half of its population of 240 million - is expected to sharply increase its medical spending and drive growth in the sector over the coming years.

The Siloam Hospitals group, which represents around 30 percent of Lippo Karawaci's asset value, operates nine hospitals and is currently building four new ones.

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