Brookfield replaces Healthscope CEO and chairman amid debt challenge
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The news: Brookfield has made sweeping leadership changes at Healthscope as the private hospital operator faces mounting financial pressure and negotiations over its $1.6 billion debt.
Chief executive Greg Horan will step down and be replaced by former Qantas and Boral executive Tino La Spina, the Australian Financial Review reported, citing an internal memo informing staff of the changes.
Chairman Len Chersky will also hand over to existing board member and fellow Brookfield executive Sophia Rihani.
The context: Brookfield fended off BGH Capital and AustralianSuper to acquire Healthscope for $4.4 billion in 2019, when private healthcare was thriving.
But the company has since struggled with rising wage costs and financial pressures, spoiling Brookfield’s plans for an exit. Instead, Brookfield has had to inject emergency funding into Healthscope as part of negotiations with lenders, the AFR noted.
The business remains under strain and according to The Australian, the company is expected to breach its banking terms in the coming weeks.
The Australian has pointed to a consortium believed to involve HMC Capital’s David Di Pilla and insurer Bupa as working on a potential buyout, and to Bain Capital’s speculated interest in acquiring equity and debt in the company, potentially as part of that consortium.
Analysts have also said ASX-listed rival Ramsay Health Care could consider buying some of the better-performing Healthscope assets, the AFR noted.
La Spina, who advised GenesisCare during its financial restructuring, will visit hospitals to meet staff and medical officers, according to the memo from Chersky to staff.
What they said: “Greg became CEO following COVID, and his leadership was crucial in stabilising the business and setting it up for the long term,” Chersky said in the memo to staff.
“He has overseen significant improvements in staff safety, turnover, patient experience, operational efficiency and in our commercial arrangements with insurers.”
“During this time, Tino will be visiting as many of our hospitals as possible, getting to know our operations and meeting staff and [visiting medical officers],” Chersky said.
The sources: The Australian Financial Review, The Australian
