The Tribune

• Philanthropist trio in First Commercial Centre purchase
• Property handed to Doctors Hospital to create 90 jobs
• Bahamian share offering still planned on $24m project

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Doctors Hospital has teamed with three philanthropists to close the $3.2m purchase of its new Freeport facility and provide services to those who cannot normally afford private healthcare.

Dennis Deveaux, the BISX-listed healthcare provider’s chief financial officer, told Tribune Business it had partnered with Lucayan Medical Philanthropic Ltd to complete the acquisition of the First Commercial Centre in a deal that received full government approval last Friday.

That entity is backed by a trio of wealthy investors including Pietro Steffanutti, principal of Freeport-based Pharmachem; Grand Bahama resident, Gregory Paton-Ash; and S. Kent Rockwell, who hails from a "noted" American industrial family.

The trio are donating the First Commercial Centre to Doctors Hospital so the latter can develop it into a "quality private medical facility" that creates 90 jobs, while addressing what Mr Deveaux described as a "generations long" healthcare need on Grand Bahama.

And the BISX-listed healthcare provider, for its part, will "match 50 percent of every dollar" invested by the group by setting-up "a non-cash fund" where it provides medical services to "the indigent" and those traditionally unable to access private care.

Mr Deveaux, confirming that Doctors Hospital still plans to offer equity ownership in its Freeport hospital to Bahamians via "a share offering", the details of which are still being worked out, said the initial $5m "capital outlay" to outfit the First Commercial Centre for medical purposes will occur by end-April this year.

He said the company's Board has approved a $20m-$24m investment in establishing the hospital, and it is "holding to that schedule" of beginning operations before year-end 2022 despite the Government's acquisition approval process taking longer than expected.

"On Friday we successfully received the approval from the Bahamas Investment Authority (BIA ) to proceed with the acquisition," Mr Deveaux told Tribune Business. "We're now in the process of closing on the acquisition of the building.

"That process has taken a little longer than we expected, but we appreciate the due diligence that the Government of The Bahamas has to do because we have a foreign shareholder (Fairfax Financial). Just today [yesterday] we received instructions from our attorneys, so in the next seven to ten days we expect we will have completed the acquisition of the building and begin.

"What does begin look like? It's the remediation of mold on the first floor, and then the demolition process which precedes any construction on the existing building. We have a design that has already been peer reviewed. It was designed by Donald Dean of The Architects Incorporated. That design has been completed for a full hospital."

Mr Deveaux said the peer review had been conducted by the Beck Group, headed by Bahamian Fred Perpall, which has been hired to provide design, engineering and project oversight services for Princess Margaret Hospital's (PMH) critical care block and other expansions.

With the review having assessed "the quality of the design, life and safety", and the Doctors Hospital financial chief said its first $5m in capital expenditure will be used to finance the purchase/ordering of pharmacy, laboratory and other medical equipment.

"Our Board has fully authorised the project. We expect the total investment to be between $20m to $24m," Mr Deveaux said. "We respect the fact that the Government had to do due diligence. While we would have wanted that due diligence to be shorter, we have to work out how to deliver that project in the 2022 calendar year.

"We're still holding to that schedule notwithstanding the due diligence period. We're absolutely holding to that schedule notwithstanding the protracted but expected due diligence by the Government."

The somewhat unique structure of the First Commercial Centre's acquisition was unveiled by the Central Bank's 2021 fourth quarter and full-year assessment, released yesterday, in which it disclosed Lucayan Medical Philanthropic's name

It said: "Land was acquired in in the central Freeport area to renovate and establish a health care facility at a cost of $3.2m. Redevelopment and outfitting of the First Commercial Centre, as a hospital and/or urgent health care facility to be operated by Doctors Hospital (Bahamas), will employ 90 persons."

Asked whether Lucayan Medical Philanthropic's principals had financed the First Commercial Centre's purchase, and are donating the property to Doctors Hospital for use as a medical facility, Mr Deveaux replied: "That is absolutely correct. We have partnered with a group of philanthropists.

"The group is headed by noted American industrialist, S. Kent Rockwell; Pietro Steffanutti, head of Pharmachem, and Gregory Paton-Ash, a local businessman. The three of them came together and partnered with Doctors Hospital on this project.

"It's an excellent example of what is possible when persons in the local community partner with the private sector in making things happen. We're going to match 50 percent of every $1 of their gift with a non-cash fund where we provide care for the indigent and those that cannot afford it."

Mr Deveaux said Doctors Hospital was still committed to giving Bahamians the opportunity to own equity in its Freeport facility, and was on the verge of hiring RF Bank & Trust as its financial adviser to determine how best this should be structured.

"It's something we continue to refine," he added. "We definitely intend to have a share offering that will probably fund the project in Grand Bahama. As part of that we intend to approach the business community, physicians etc around how they can buy shares in Doctors Hospital. That's something we continue to explore."

Doctors Hospital's Grand Bahama expansion aims to plug a significant market gap in the delivery of healthcare services, Mr Deveaux said. "Notwithstanding our best efforts to invest in the Rand [Memorial Hospital], especially after Hurricane Dorian there's been a need for a high quality private medical facility.

"There's a large industrial base there that has a ton of employment. This is a generations' long need, and we feel we are doing our duty to extend quality healthcare to the people of Grand Bahama and Freeport. We believe it's a critical need."

Mr Deveaux said there were ongoing discussions between Doctors Hospital and its partner, Cleveland Clinic, over the "strategic role" the latter could play in delivering healthcare on Grand Bahama. The discussions, which have taken place at the "very senior, head-to-head level", have also involved the Government.

The talks have focused on Cleveland Clinic's "unique" offerings that are "beyond the capacity of Doctors Hospital locally", such as its ability to treat strokes, heat disease, cancer and chronic non-communicable diseases.

Mr Deveaux added that Doctors Hospital's Eight Mile Rock clinic will open this April, offering six out-patient dialysis bays so that more than 30 persons from that community do not have to travel to Freeport three times per week for this treatment.