National private healthcare provider Healthscope prepares for sale amid $1.6bn debt
A major Australian healthcare provider is preparing for sale following reports the company is $1.6bn in debt.
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Healthscope is preparing for sale after reaching agreements with senior lenders following reports the national private healthcare provider is $1.6bn in debt.
Healthscope, which operates 38 hospitals across Australia, on Tuesday announced it had entered into “short-term forbearance arrangements with the requisite majority of its senior lenders” until May.
“These arrangements provide time and enhanced liquidity for Healthscope to focus on agreeing a longer-term solution for the business with its key stakeholders,” a Healthscope spokesperson said.
“As part of these forbearance arrangements, Healthscope will commence preparations for a potential sale of the business and concurrently engage in broader restructure discussions with its key stakeholders.”
The spokesperson said the loan repayment relief would provide “stability of ongoing operations” as well as a “greater likelihood of a longer-term solution in the best interests of all stakeholders”.
The healthcare provider also agreed to a short-term deferral with landlord Northwest Healthcare Properties REIT.
“Having achieved these milestones we will also re-engage with the HMC-managed entities
and invite HMC to participate in discussions on longer-term solutions that ensure relevant
hospitals can sustainably operate,” the spokesperson said.
“HMC and potential partners are also said to be considering an offer for Healthscope.
“Healthscope has not received any proposal from HMC or any other potential partner.”
Healthscope was purchased by Brookfield for $4.4bn in 2019, according to The Australian, but the company is more than $1bn in debt from rent payments among other costs.
The news comes just weeks after the company, which operates Northern Beaches Hospital among 37 others across Australia, came under scrutiny following the death of two-year-old Joe Massa.
Joe died last September after he was wrongly triaged and waited two hours for a bed at the hospital.
He was later taken to Sydney Children’s Hospital in Randwick after he suffered a cardiac arrest, and he died as a result of brain damage.
Healthscope came under scrutiny over Joe’s death in NSW budget estimates last month.
NSW Health Minister Ryan Park said he didn’t support public privatisation hospital models when asked if he supported bringing Northern Beaches Hospital “back into public hands”.
“It’s not a model that we support. It’s not a model that we are ever going to do,” Mr Park said.
The Fair Work Commission also cancelled what was going to be a 26-hour, statewide strike across eight hospitals run by Healthscope last month.
However, restructure discussions have been taking place at Healthscope long before scrutiny over Joe’s death and the planned strikes.
Originally published as National private healthcare provider Healthscope prepares for sale amid $1.6bn debt
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