The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Dr Conville Brown has been trying to raise $10 million from Bahamian investors to expand his Centreville-based The Medical Pavilion Bahamas, Tribune Business can reveal, with stem cell and surgical therapies included in the plans.

Documents seen by this newspaper disclose that the Centreville Medical Pavilion Development Company, which manages The Medical Pavilion, has this month been trying to raise the expansion capital via two corporate bonds.

One, for $6 million and carrying a 7.925 per cent interest coupon, is set to mature in 2018, while the other bond tranche - this one valued at $4 million - has an 8.125 per cent yield and matures in 2023.

The documents, produced by Leno Corporate Services, which is acting as financial adviser and placement agent for Dr Brown and his wife, said the proceeds would be used to finance an increase in The Medical Pavilion’s “medical service offerings”.

But the largest portion - some $6 million - will be used to pay off existing mortgages held on The Medical Pavilion by a combination of Scotiabank (Bahamas) and CIBC FirstCaribbean International Bank (Bahamas).

The Centreville Medical Pavilion Development Company’s $10 million capital raising is a private offering, meaning that only certain institutional investors are being targeted for participation. It is not a public offering, so members of the Bahamian public should not seek to apply or become involved.

Multiple capital markets sources yesterday confirmed to Tribune Business that they had been pitched to invest in the Medical Pavilion Bahamas bond offering, although none indicated whether they or their clients would participate.

Contacted by Tribune Business in Antigua, where he is constructing another cancer centre, Dr Brown was tight-lipped on the capital raising, although he effectively confirmed that an offering document had been issued.

“I don’t want to say anything at this point in time. We’re definitely going to be doing an expansion, I spoke about it earlier this year,” he replied.

Declining to comment on the offering’s progress, as it was supposed to close after just two weeks on May 23, Dr Brown said: “It’s a private offering. I don’t want to make any comments right now. It’s a bit sensitive.”

The few documents seen by Tribune Business describe The Medical Pavilion Bahamas as a four-storey, 40,000 square foot medical complex situated on Collins Avenue.

It is home to medical service providers including The Bahamas Heart Centre, The Bahamas Chest Centre, The Imaging Centre and The Cancer Centre Bahamas.

“The Medical Pavilion now plans to expand its medical services offerings via the development of an Ambulatory Surgical Centre with limited overnight accommodations and multi-specialty capabilities,” the documents said.

“Said facility will be known as The Institute for Advanced Medical Procedures (IAMP), and will serve to accommodate a market in the Bahamas for highly profitable, leading edge, niche medical services sought after by international patients and partners.”

Among these planned services are stem cell, “minimally invasive” surgical, and intervention therapies. Conditional approval has already been received from the Ministry of Health’s ethics committee for combined gene therapy and stem cell transplantation.

Apart from taking out the bank mortgage, the documents show some $750,000 worth of bond proceeds will be used to construct a radiology suite and operating room; another $750,000 will go on two operating rooms’ and $2 million will be invested on ‘support areas’ such as sterilization, changing rooms and equipment.

Ultimately, some $9.5 million net will be received from the bond offering, the documents reveal. The bonds will rank senior to any other debt or obligation owed by The Medical Pavilion Bahamas or the management company.

However, the bonds will not be listed on the Bahamas International Securities Exchange (BISX) or be available for public trading.