How did you arrive at HCW assets being around half made up by Healthscope?
HCW owns 4 Healthscope properties directly (100%) totalling $288.4m (approx 18% total assets) + a share of 7 through it's strategic investment in UHF. Distributions from UHF LY represented approx 18% of total income ($79m) before fees & interest. (Assuming that's all from Healthscope assets?).
So I'd say your 50% income at risk estimate is too high & should be closer to 35%.
35% of $79m is $27.7, 20% reduction in rent is around $5.5m. $5.5m is approx 12% LY DFO/distributions.
CY distributions 8.2c, so if 12% was lost due to new contracts on Healthscope assets that would reduce distributions to approx 7.2c. 7.2c at 95c unit price is a yield of 7.6%, a little high for a REIT but not massively so.
So IMO current unit price is probably around the right level to allow for Healthscope contracts to be defaulted on & resigned at a 20% discount. Assuming that's even correct.
Reports is the press suggest rival hospital operators are ready to step in should Healthscope go into administration.
HCW Price at posting:
94.5¢ Sentiment: Buy Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)