Steward Health Care filed for bankruptcy protection on Monday to resolve its liquidity issues and negotiated a bailout loan with its landlord Medical Properties Trust.
The Zhitong Finance App learned that Steward Health Care System LLC, a healthcare company that operates 33 community hospitals in nine US states, applied for bankruptcy protection on Monday to resolve its liquidity issues and negotiated a rescue loan with its landlord Medical Properties Trust (MPW.US). The company has filed a Chapter 11 bankruptcy protection application with the Southern District Court of Texas listing assets and liabilities between $1 billion and $10 billion. This bankruptcy filing will allow Steward Health to continue its operations while seeking a restructuring plan. As part of the restructuring agreement, Medical Properties, an American real estate trust focused on healthcare facilities, agreed to provide $75 million in initial debtor holding capital and possibly provide additional loans of up to $225 million after certain conditions are met.
Notably, Medical Properties already provided a $60 million bridge loan to Steward Health in January and delayed some of the rent arrears.
According to reports, a bridge loan (bridge loan), also known as a bridge loan, is a short-term bridging loan form. It is commonly used to resolve capital turnover issues and help borrowers temporarily obtain necessary financial support until long-term funding is in place.
Steward Health's CEO Ralph de la Torre (Ralph de la Torre) mentioned that factors that led to the company filing for bankruptcy included rising costs and “insufficient reimbursement from government payers.” Additionally, delays in the sale of Stewardship Health, the doctors' business unit, forced the company to find other sources of funding.
De La Torre said that in the bankruptcy protection process, Steward Health will be able to more effectively transition its ownership of Massachusetts hospitals and keep all hospitals open to continue providing treatment to patients and ensure continued care and services for patients and communities.
Steward Health's bankruptcy case number is 24-90212 and is handled by the U.S. Bankruptcy Court for the Southern District of Texas. As of press release, Medical Properties' shares fell 11.91% to $4.29 in pre-market trading.