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The Makati Medical Center (MMC) has been able to restructure its P1.2-billion loan from its creditor banks.

“The creditors agreed to extend the term of the loan to eight years, which include a three-year grace period on principal payments. This development jives very well with the recent issuance of convertible notes to raise proceeds for the improvement of the hospital,” MMC director for finance division Carlito B. Soliman said in a briefing yesterday.

The loan was incurred in 2005 by Medical Doctors, Inc. (MDI), owners of MMC.

However MDI has not been able to pay both the principal and the interest. With the extension of the loan payment, MDI will now have the leeway  to use its available funds to refurbish and upgrade the hospital in the next three years.

MDI said it will allocate P1.5 billion  for a three-year upgrade of MMC facilities. Part of the funding will come from  the proceeds of a P961- million convertible notes issue early this month.

The full amount of these notes was taken up by Metro Pacific Investment Corp. (Metro Pacific) and by the principal shareholders, including senior doctors, who have exercised their pre-emptive rights.

The notes will be converted into equity after five years, representing at least 35 percent.

Metro Pacific subscribed to notes worth P600 million equivalent to at least 32 percent, making the company the single biggest shareholder of the hospital.

The upgrading plan includes a 12-level hospital wing due for completion in mid 2008.

In 2006, MDI’s reported a net profit of P223.1 million, more than 13 tons higher than the P15.3 million it made a year earlier.     

The higher profit was supported by higher revenues amounting to P2.7 billion from P2.5 billion the previous year.