Sec Form 13D Filing - KKR Credit Advisors (US) LLC filing for Quorum Health Corp (QHC) - 2019-12-02

1	NAMES OF REPORTING PERSONS
	KKR Associates Special Situations (EEA) II Limited
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			2,513,651
		8	SHARED VOTING POWER
			0
		9	SOLE DISPOSITIVE POWER
			2,513,651
		10	SHARED DISPOSITIVE POWER
			0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	2,513,651
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	7.6%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	CO

1	NAMES OF REPORTING PERSONS
	KKR Special Situations (Offshore) II Limited
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			2,513,651
		8	SHARED VOTING POWER
			0
		9	SOLE DISPOSITIVE POWER
			2,513,651
		10	SHARED DISPOSITIVE POWER
			0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	2,513,651
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	7.6%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	CO

1	NAMES OF REPORTING PERSONS
	KKR Management LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			2,988,781
		8	SHARED VOTING POWER
			0
		9	SOLE DISPOSITIVE POWER
			2,988,781
		10	SHARED DISPOSITIVE POWER
			0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	2,988,781
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	9.1%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	OO

Item 2.

Identity and Background

(i)

KKR Credit Fund Advisors LLC, a Delaware limited liability company (“KCFA”);

(ii)

KKR Credit Advisors (US) LLC, a Delaware limited liability company (“KCA”);

(iii)

Kohlberg Kravis Roberts & Co. L.P., a Delaware limited partnership (“Kohlberg Kravis Roberts &  Co.”);

(iv)

KKR Management Holdings L.P., a Delaware limited partnership (“KKR Management Holdings”);

(v)

KKR Management Holdings Corp., a Delaware corporation (“KKR Management Holdings Corp.”);

(vi)

Powell Investors II Limited Partnership, a Cayman Islands limited partnership (“Powell”);

(vii)

KKR Special Situations Fund II Limited, a Cayman Islands limited company (“Fund II Limited”);

(viii)

KKR Special Situations (EEA) Fund II L.P., a limited partnership organized under the laws of England and Wales (“Fund II LP”);

(ix)

KKR Associates Special Situations (EEA) II Limited, a Cayman Islands limited company (“KKR Associates II”);

(x)

KKR Special Situations (Offshore) II Limited, a Cayman Islands limited company (“Offshore II Limited”);

(xi)

KKR Fund Holdings L.P., a Cayman Islands limited partnership (“KKR Fund Holdings”);

(xii)

KKR Fund Holdings GP Limited, a Cayman Islands limited company (“KKR Fund Holdings GP”);

(xiii)

KKR Group Holdings Corp., a Delaware corporation (“KKR Group Holdings”);

(xiv)

KKR & Co. Inc., a Delaware corporation (“KKR & Co.”);

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(xv)

KKR Management LLC, a Delaware limited liability company (“KKR Management”);

(xvi)

Henry R. Kravis, a United States citizen; and

(xvii)

George R. Roberts, a United States citizen (the entities and persons listed in items (i) through (xvii) are collectively referred to herein as the “Reporting Persons”).

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Item 3.

Source and Amount of Funds or Other Consideration

Item 4.

Purpose of the Transaction

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No assurances can be given that the Proposal will be accepted by the Issuer or that, if accepted, the Potential Transaction contemplated under the Proposal will be consummated. There is no binding obligation on the part of the Issuer or KCA with respect to the Proposal and neither the Issuer nor KCA is obligated to complete the Potential Transaction, and a binding commitment with respect to the Potential Transaction will result only from the execution and delivery of definitive documentation. Any definitive documentation entered into in connection with the Potential Transaction is likely to be subject to customary closing conditions.

If the Potential Transaction is completed, one or more of the transactions, events or actions specified in clauses (a) through (j) of Item 4 of Schedule 13D may result, including, without limitation, an acquisition of additional securities of the Issuer, an extraordinary corporate transaction (such as a merger) involving the Issuer, other material changes in the Issuer’s business, or corporate structure, and the shares of Common Stock would become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act and would be delisted from the New York Stock Exchange.

The Reporting Persons expect to continue to engage in discussions with management, the Board, the Issuer’s various stakeholders, potential debt and equity financing sources, and other relevant parties and may take other actions concerning any extraordinary corporate transaction (including but not limited to a merger, reorganization or liquidation) or the business, operations, assets, strategy, future plans, prospects, corporate structure, board composition, governance, management, capitalization, dividend policy, charter, bylaws, corporate documents, agreements, de-listing, or de-registration of the Issuer, which discussions may include proposing or considering proposals and counterproposals. Except as indicated above, none of the Reporting Persons currently have any plans or proposals that relate to or would result in any other action specified in Items 4(a) to (j) of Schedule 13D. Although the foregoing reflects activities presently contemplated by the Reporting Persons, the foregoing is subject to change at any time, and the Reporting Persons reserve their right to change their plans and intentions with respect to the Issuer, including in connection with any of the actions discussed in this item 4, including, among others, any terms related to the Proposal. Any action taken by the Reporting Persons may be effected at any time and from time to time, subject to any applicable limitations imposed by any applicable laws.

In addition to the shares of Common Stock reported as beneficially owned herein, certain Client Accounts currently hold $156,279,000 principal amount of the $400,000,000 aggregate principal amount of 11.625% Senior Notes due 2023 and $125,412,994 principal amount of the $880,000,000 senior secured term loan facility of the Issuer. The portfolio management and voting discretion of certain of the above-mentioned debt-holding Client Accounts is managed separately within KCA from that of the Client Accounts which hold the shares of Common Stock reported as beneficially owned herein.

Item 5 is hereby amended and restated in its entirety to read as follows:

(a)-(b) As an investment advisor or the parent of an investment advisor, to a number of Client Accounts, KCA may be deemed to have the power to vote or direct the vote of (and the power to dispose or direct the disposition of) 2,988,781 shares of Common Stock (the “Total Reported Shares”), which represents approximately 9.1% of the Common Stock outstanding, based on 32,916,020 shares of Common Stock outstanding as of November 6, 2019, as reported in the Issuer’s Form 10-Q, filed with the Securities and Exchange Commission on November 7, 2019.

Powell has directly acquired, and may be deemed to have the power to vote or direct the vote of (and the power to dispose or direct the disposition of) 2,513,651 shares of Common Stock (which, for the avoidance of doubt, are included in the Total Reported Shares), which represents approximately 7.6% of the Common Stock outstanding. In addition, as an investment advisor to Powell and another Client Account, KCFA, a direct wholly-owned subsidiary of KCA, may be deemed to have the power to vote or direct the vote of (and the power to dispose or direct the disposition of) a total of 2,621,439 shares of Common Stock (which, for the avoidance of doubt, are included in the Total Reported Shares), which represents approximately 8.0% of the Common Stock outstanding.

Each of Kohlberg Kravis Roberts & Co. (as the holder of all of the outstanding equity interests in KCA), KKR Management Holdings (as a general partner of one of the Client Accounts and the general partner of Kohlberg Kravis Roberts & Co.), KKR Management Holdings Corp. (as the general partner of KKR Management Holdings), Fund II Limited (as the general partner of Powell), Fund II LP (as the general partner of Fund II Limited), KKR Associates II (as the general partner of Fund II LP), Offshore II Limited (as the general partner of KKR Associates II), KKR Fund Holdings (as an indirect general partner of certain of the Client Accounts, including Powell), KKR Fund Holdings GP (as a general partner of KKR Fund Holdings), KKR Group Holdings (as the sole shareholder of KKR Fund Holdings GP, a general partner of KKR Fund Holdings, and the sole shareholder of KKR Management Holdings Corp.), KKR & Co. (as the sole shareholder of KKR Group Holdings), KKR Management (as the Class B common stockholder of KKR & Co.) and Messrs. Kravis and Roberts (as the designated members of KKR Management) may also be deemed to beneficially own some or all of the shares of Common Stock owned by the Client Accounts and reported herein.

To the best knowledge of the Reporting Persons, none of the individuals named in Item 2 beneficially owns any shares of Common Stock except as described herein.  The filing of this Schedule 13D shall not be construed as an admission that any of the above-listed entities or individuals is the beneficial owner of any securities covered by this statement.

(c) None of the Reporting Persons, or, to the best knowledge of the Reporting Persons, any other individual named in Item 2, has engaged in any transaction in any shares of Common Stock during the past 60 days.

(d) The disclosure in Item 3 and Item 4 is incorporated herein by reference.

(e) As described above in the Explanatory Note, KKR Group Holdings L.P. and KKR Group Limited are no longer reporting persons on this Schedule 13D.

Item 6 is hereby amended by adding the following:

The information set forth in Item 4 of this Schedule 13D is hereby incorporated by reference into this Item 6.

Item 7 is hereby amended and restated as follows:

SIGNATURES

After reasonable inquiry and to the best of its or his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: December 2, 2019

Directors of KKR & Co. Inc.

The following sets forth the name and principal occupation of each of the directors of KKR & Co. Inc. Each of such persons is a citizen of the United States other than Xavier Niel, who is a citizen of France.

EXHIBIT A

JOINT FILING AGREEMENT

This will confirm the agreement by and among the undersigned that the Schedule 13D filed with the Securities and Exchange Commission on or about the date hereof with respect to the beneficial ownership by the undersigned of the shares of common stock, par value $0.0001 per share of Quorum Health Corporation, is being filed, and all amendments thereto will be filed, on behalf of each of the persons and entities named below that is named as a reporting person in such filing in accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Dated:  December 2, 2019

EXHIBIT B