New Frontier, a Healthcare Provider in China, Seeks to Register Up to $1.6 Billion in Shares

The offering includes a resale of ordinary shares and an exercise of warrants, upon which the operator of United Family Healthcare may receive up to $309 million in proceeds.

Author: Anna Vodopyanova   

New Frontier Health Corp. (NYSE: NFH), one of China's largest healthcare providers, has applied to register additional shares and warrants worth up to $1.6 billion in New York.

The proposal is a primary offering of 26.9 million ordinary shares upon the exercise of warrants issued in the company's IPO and private placement, as well as a potential resale of up to 127.3 million ordinary shares held by existing stockholders and 12.5 million warrants to purchase ordinary shares.

New Frontier will not receive the proceeds from the share sale, the Beijing-based company said in a filing with the U.S. Securities and Exchange Commission on Friday. From the exercise of the public warrants, the company will receive up to an aggregate of approximately $309 million, which it intends to use for general corporate purposes and to repay debt.

United Family Healthcare (UFH), the main brand of New Frontier, operates a full network of healthcare facilities in China. UFH's history began in 1997, when it opened its first hospital in Beijing. Since then, it has expanded nationwide and added 24/7 emergency rooms, intensive care units, neonatal intensive care units, operating rooms, clinical laboratories, radiology and blood banking services.

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New Frontier, formerly a blank check company, announced the acquisition of UFH in late July 2019. It bought the private healthcare operator from shareholders including affiliates of TPG Capital Asia and Fosun Pharma. The chairman of Fosun Pharma, Qiyu Chen, at the time said his company will remain a supporter in UFH.

In the first half-year of 2019, New Frontier generated $175.6 million in revenue, up 22% year-over-year. Net loss quadrupled from the same period in 2018 to $17.2 million, according to the filing. For the full year 2018, the company reported $302.7 million in revenue on losses of $22.2 million.

On Friday, NFH shares closed at $9.38 apiece, while NFH WS – New Frontier's public warrants – closed at $1.40 each.

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