Health minister says Healthscope will not be bailed out by taxpayers
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More news: Minister for Health and Ageing Mark Butler has said the government has met with Healthscope’s administrator KordaMentha and receiver McGrathNicol and that the company will not be bailed out by taxpayers.
Butler also said the assets should be not be "put in jeopardy to satisfy international investors".
What they said: “The Government expects all parties to continue to put patient care and workers as their priority. We expect that these hospitals remain a critical part of our healthcare system,” Butler said in statement.
“As the Government has said all along, there will be no taxpayer bailout. We remain steadfast in our view that an orderly sales process that maintains the integrity of the entire hospital group will provide the best outcome for patients, staff, landlords and lenders.”
McGrathNicol appointed as Healthscope receivers
The news: Healthscope’s parent entities have entered receivership, with McGrathNicol Restructuring appointed to complete the sale of the business.
The numbers: The Commonwealth Bank has provided $100 million in new funding to support operations during the sale process.
Healthscope said this was in addition to the company’s current cash balance of $110 million, and “substantial additional asset backing across the group”. It noted that its existing working capital financier was also providing support.
The group’s 37 hospitals will remain open with no impact on staff, doctors, or patient care, Healthscope said.
The context: The company has struggled to pay around $1.6 billion in debt and has about 20 lenders. Over the weekend, media reports said that Healthscope’s lenders refused to accept its offer to take board control to enable a solvent restructure.
Healthscope said McGrathNicol’s intention was to transition all its hospitals to new ownership, with no plans for hospital closures or redundancies.
The Healthscope board has appointed partners from KordaMentha as administrators.
What they said: Healthscope chief executive Tino La Spina said: “All 37 of our hospitals continue to operate as normal and today’s appointment of receivers, including the additional funding, ensures a stable path to a sale, with no impacts on any hospitals, staff or patients”.
“There is no interruption to the outstanding care we provide. Our incredible teams are all working as normal, providing the high standard of care they always have. The additional funding, while we do not anticipate it being required, provides additional support,” he said.
The source: Healthscope media release
