HMC Capital interested in taking over Healthscope hospitals
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The news: HMC Capital is leading a consortium interested in taking over 11 Healthscope hospitals, currently held by HMC’s own Healthco Healthcare and Wellness REIT (HCW).
What they said: Speaking on a HCW call on Friday morning, HMC Capital real estate analyst Sid Sharma confirmed the consortium of “capable and qualified parties” was interested in the hospitals in case a heavily indebted Healthscope was unable to make repayments.
“If Healthscope were to breach its lease obligations, HCW, as the landlord, has the rights to replace Healthscope as the operator at our facilities,” Sharma said, adding that “the situation will need to come to a head sooner [rather] than later”.
“We understand that HMC is in discussions with a broad group of key stakeholders regarding potential options. HCW will consider meaningful executable proposals that maximise unitholder value and ensure that these hospitals continue to serve the Australian community that relies on them.”
While Healthscope’s ability to service its $1.6 billion debt load has been heavily scrutinised, Sharma said the fund remained “very comfortable in our position and very proud of our assets”. With hospital volumes remaining strong, HCW says it is only Healthscope’s capital structure that is in trouble.
To date, the Brookfield-owned Healthscope has missed none of its repayments.
The context: HMC owns around 22% of the REIT according to corporate filings.
In 2023 HMC's REIT raised $320 million at an issue price of $1.35 a share to purchase 11 Healthscope Hospitals at a valuation of $1.2 billion. Those assets were revalued at $1.5 billion in December.
At the same time, HWC’s share price has been falling, dropping below $1 in January where it remains today.
Healthscope is a tenant of four hospitals owned by HCW and a further seven owned by the Unlisted Healthcare Fund (UHF) HCW owns half of the units in UHF with the balance held by four major institutional investors.
The source: ASX
