Ann: Healthscope Update, page-292

'Healthscope, Australia’s second-largest private hospital group, is expected to fall into receivership this week after it failed to convince lenders to accept its offer to take control of the board and keep the debt-laden company solvent.The owner of 38 private hospitals said on Sunday it remained in talks with the syndicate of banks and hedge funds which control its $1.6 billion in debt and was prepared for all possibilities, including receivership.“Healthscope is open to finding a solution that does not require lenders to assume formal control, but is also prepared if lenders decide to take a more formal path, including the appointment of receivers to complete the current sale process,” a Healthscope spokesman said.'

'People familiar with the situation but not authorised to speak publicly said Healthscope had not given up on efforts to avoid receivership, but it was not optimistic. The company is expected to go into receivership within days.They said foreign hedge funds, including London’s Polus Capital Management and Los Angeles-headquartered Canyon Partners, which control large parcels of Healthscope’s debt favoured a quick solution which would likely lead to receivership and asset sales to maximise their returns.'

'However, local lenders, including the four major banks which control around 15 per cent of the debt, were more sympathetic to a solution which would avoid disrupting hospitals, 19,000 staff and patients.The Australian Nursing and Midwifery Federation, which has about 9000 members working in Healthscope hospitals, said it was in discussions with state and federal governments to avoid closures, and wanted a say in who would control the company in the future.“We are extremely concerned. There have been discussions for some time. We are working with both state and federal governments and all the stakeholders to keep those hospitals open,” ANMF secretary Annie Butler said. “We are going to insist we are front and centre of those discussions with prospective buyers so we can guarantee our members will be in safe hands.”The federal government has said it is watching the situation closely and wants Healthscope to remain solvent. Labor wants to avoid closures or disruptions, which would put pressure on a stretched public system.'

'Healthscope said on Sunday there had been “considerable interest” from buyers in the entire network as well as individual hospitals. While there is no guarantee all the hospitals will remain open under new owners, there are no imminent closures. “All of our hospitals are operating normally, with the full support of lenders and other stakeholders,” Healthscope said.'

'Many Australian private hospital operators, including Ramsay Health Care, St Vincent’s Cabrini Health, and Epworth Healthcare, have expressed non-binding interest in some Healthscope assets. British health insurance giant Bupa has also appointed advisers to look at potentially buying assets, The Australian Financial Review’s Street Talk column has reported.'