Ann: Healthscope Update, page-61

lol Brookfield or what ever entity, is effectively private equity.

These guys are smart, and use leverage.

So when they bought Healthscope 5 odd years ago, the business environment was different.

But typical private equity 101: they didn't buy out Healthscope with pure equity, there was an equity component (that probably was funded by a subcomponent fund), the rest with debt.

And typical private equity 102: strip the hard assets and flog them off.
In this case it was the properties: Healthscope sold off the physical hostipals.

Private equity 103: bank the money from selling the hard assets, ie the properties, to repay the equity holders.

So this effectively leaves the debt holders on the hook, and the equity holders have already got their capital back. So anything further is just gravy.

The problem is now those equity holders are now on the hook to inject capital back into the business. Equity holders not happy.

Debt holders are up sh**t creek as they are left holding the donkey.

That's why HMC (not HCW but HMC) are now offering debt holders 15-20c on the dollar of debt to buy the debt back from them.
Debt holders not happy, want more.
But Debt holders are the morons, they lent money 'covenant light' to Brookfield, and must now pay the consequences.

So let the games begin....