Collapsed operator Healthscope nears sale with top hospitals fiercely contested

Sources close to Healthscope’s receiver have suggested that the firm is keen to have a swift outcome on the sale of the collapsed private hospital operator, and an announcement about it may be made as early as Monday.

It comes with talk that receiver McGrathNicol will announce lenders could get as much as 55c in the dollar on their investment, with Calvary expected to pay between $100m and $140m for the 12 hospitals leased from Northwest Healthcare and about $100m for the hospitals leased from HMC Capital and the top-tier hospitals potentially attracting an overall price of $600m combined.

As reported, so far, it’s expected Calvary Healthcare takes the 12 Healthscope hospitals leased from Northwest Healthcare Properties, and possibly more, while the top-tier hospitals are being fiercely contested.

Ramsay Health Care has bid for the National Capital Private Hospital in Canberra and one other, while St John of God, Calvary, Pacific Equity Partners and Epworth have been all in contention for its most lucrative hospitals.

These include National Capital, Prince of Wales and Gold Coast Private hospitals.

Cabrini Health looks set to buy Holmesglen Private Hospital, while Mater Health is keen on the Sunnybank Private Hospital in Queensland.

It’s still unclear what operators take sites leased from the interests of HMC Capital, but Epworth HealthCare is one of the groups that has been in talks.

One interesting point of focus in the sale process is the future of Adelaide hospitals run by Healthscope on behalf of the Adelaide Community Healthcare Alliance Incorporated.

ACHA is South Australia’s largest private hospital group and partners with the Uniting Church.

The understanding is that it will take three of its hospitals that were run by Healthscope back.

But some believe it may look to bring in a new operator, as setting up the systems and infrastructure to operate the hospitals could be a challenge the group is not keen to take on.

Healthscope collapsed in May with $1.6bn owing after the business was purchased by Brookfield in 2019 for $4.4bn.

To finance the transaction at the time, Brookfield sold Healthscope’s property sites for $2bn to real estate groups.

Final bids in the sale process run by receiver McGrathNicol and Houlihan Lokey were received at the end of last month.

The decision to move quickly on a sale is believed to be linked to a desire to limit the uncertainty surrounding the hospital operator’s suitor for its staff and stakeholders.