Steward Health Care has announced the sale of all 31 of its hospitals in the US, with the intention to finalise the deals by the end of this summer.
The attorneys of the US-based hospitals operator, which filed for bankruptcy protection on 6 May, revealed in a court hearing in Houston on 7 May that the sale is a strategic move to manage its $9bn in total liabilities, Reuters reported.
During Chapter 11 proceedings overseen by US Bankruptcy Judge Chris Lopez, Steward attorney Ray Schrock expressed the company's intention to maintain hospital operations in the long term.
The news agency quoted Schrock as saying: “Our goal remains that there are zero hospitals closed on our watch. There's going to be a change in ownership in many hospitals, we recognise that. But we don't want to see any of these communities fail to be served.”
Court documents filed prior to the first hearing disclosed that Steward's existing liabilities include around $6.6bn in long-term rent obligations, $1.2bn in loans, nearly $1bn in unpaid bills from vendors and medical suppliers, as well as $290m in unpaid wages and benefits for employees.
Despite the substantial debt, Schrock emphasised that Steward holds real value, with $6bn in annual revenue prior to the bankruptcy filing.
Schrock highlighted that the company has been negotiating the sale of its physician group, named ‘Stewardship Health Care’, to Optum Care, a subsidiary of UnitedHealth, which could potentially repay the company's loans and partially settle vendor debts.
Stewardship Health Care’s sale was initially seen as a way to prevent bankruptcy. However, delays in regulatory approvals led to a need for emergency financing, which Schrock stated was insufficient for sustained operations.
During 7 May’s hearing, Judge Lopez has approved a $75m loan from Medical Properties Trust, the real estate owner of Steward's hospital locations, which is also a creditor with $6.6bn in lease obligations.
Steward is also planning to auction its hospitals on 28 June for facilities outside Florida and a 30 July auction for its nine Florida hospitals.
These dates are part of the terms of new bankruptcy loan, and Schrock indicated that the company might request more time for hospital sales, if necessary.
