Healthscope to call in receivers: reports
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The news: Private hospital owner Healthscope is set to enter receivership this week, after lenders refused to accept its offer to take board control to enable a solvent restructure during a meeting on Thursday, according to media reports.
The numbers: The company has been struggling to find a way to pay an outstanding $1.6 billion in debts, and around 20 lenders will now determine what happens to the country’s second largest private hospital group.
The Australian reports that only six of Healthscope’s 37 hospitals are profitable, and the company reportedly held just $110 million cash on its balance sheet for operating costs. Healthscope currently employs around 18,000 nationwide.
Private equity owner Brookfield purchased the operator in 2019 for $4.4 billion, and last week invited lenders to appoint nominees to the board to enable a solvent restructure.
The context: A Healthscope spokesperson told the AFR that the company “is open to finding a solution that does not require lenders to assume formal control, but is also prepared if lenders decide to take a more formal path, including the appointment of receivers to complete the current sale process.”
Sources told the AFR that the company has not given up on efforts to avoid receivership but is not optimistic. They also said that while foreign hedge funds which control sizeable portions of Healthscope’s debt are pushing for fast solutions which could prompt receivership and asset sales, local lenders holding an approximate 15% of the debt are more supportive of solutions which minimise disruption to the group’s operations.
Earlier this month, HMC Capital said it was getting closer to finding a new tenant for its 11 Healthscope hospitals, as it looks to resolve the long-running saga between its Healthcare and Wellness REIT that owns the hospitals and Healthscope, which operates them and is struggling under debt.
The sources: AFR, The Australian, Capital Brief
