Steward Health Says It Needs $225M by June 14
YOUNGSTOWN, Ohio – Medical Properties Trust, the landlord that lent bankrupt Steward Health Care System $75 million to continue operations while it attempts to sell its hospitals, is balking at lending the company another $225 million, which Steward needs “by no later than the week ending June 14.”
That’s according to a declaration filed May 31 by Tyler W. Cowan, chief restructuring officer for Lazard Freres & Co., the investment banking firm retained by Steward.
The initial MPT financing “was crucial to allow [Steward] to stabilize their health care operations and ensure continued patient care during the initial days” following the Chapter 11 petition filed May 6. But crucially, Steward needs another $225 million in financing, which is “subject to MPT’s discretion,” Cowan states.
“Several third-party lenders” are interested in offering Steward a lifeline, he says. But they won’t begin talks until U.S. Bankruptcy Court in Houston approves Steward’s emergency motion that guarantees they would be paid fees and expenses and be first in line – or “primed” – to be repaid before all other lien holders.
The financing stalemate tops the agenda in a hearing scheduled to begin at 1 p.m. (Central time) in Houston.
Approval of the emergency motion by U.S. Judge Christopher Lopez would “encourage a competitive post-petition financing marketing process and will facilitate [Steward] obtaining critical finance on favorable terms,” Cowan’s declaration states.
This would enable Steward “to progress expeditiously toward securing a binding commitment [and court approval] of new-money financing by June 10,” he says.
Among the 31 hospitals Steward operates in eight states are Trumbull Regional Medical Center in Warren, Hillside Rehabilitation Hospital in Howland and Sharon Regional Hospital in Sharon, Pa.
The investment banking company hired to market Steward’s hospitals in Ohio and Pennsylvania said in a court filing May 27 that it has received indications of interest “from a number of buyers for some or all of the debtors’ assets.”
No further information, specifically what that “number” is and if bids are likely, was disclosed.
Also on the agenda for today’s hearing is Steward’s motion on how it intends to sell its hospitals.
For its hospitals in Ohio, Pennsylvania and five other states, Steward proposes a June 24 deadline for bids to be received, court auctions to be held June 27 and a final hearing on each sale July 2.
For its hospitals in Florida, the proposed bid deadline is July 27, the auctions July 30 and sale hearing Aug. 5, should Steward’s motion be approved.
The rapid timetable must be approved by Lopez.
Copyright 2024 The Business Journal, Youngstown, Ohio.
