Likely paths on this one IMO. 1) Last minute takeover of Healthscope with majority of debt written off or restructured 2) Healthscope goes into administration & hospital operations sold off piece meal to new operators. 3) Healthscope goes into administration & hospital operations sold off to a single buyer (HMC/PE)
Path 1 will have little or no impact on HCW with current leases continuing & any overdue rent recovered. Paths 2/3 potential for lease incentives given reducing net income over the short to medium term in conjunction with recovery of outstanding rent.
On the basis that all the HCW owned hospitals are in prime, high demand locations it is very unlikely that any will be closed.
Investors have been buying up Healthscope debt & are still looking to do so. You don't do this with a company tipped to go into Administration in a matter of weeks unless you believe the Healthscope business has a future & therefore value to pay back the debt. Especially as the debt has been changing hands at 40c+ in the $.
HCW's position hasn't really changed since the start of the year, it's just got closer to a resolution with Healthscope.
HCW Price at posting:
85.0¢ Sentiment: Buy Disclosure: Held
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