Hospital owner in talks to avert £2bn debt crisis

 
Michael Bow
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THE owner of some of the UK’s best-known private hospital sites is to hold crunch talks with lenders over a £2bn debt pile, opening the door for a creditor takeover of the sites.

General Healthcare Group, which owns 69 hospital sites including 9 Harley Street and Fitzroy Square hospital in London, is racing against time to clinch a deal with its lenders before the debt matures in October.

Lazard and PwC have been appointed advisers on talks as the lenders, led by Barclays, Mizuho and German bank Pfandbriefbank, seek to thrash out a deal with GHG.

Options on the table are understood to include an extension of the loan, fresh equity injection or a full blown seizure of the properties by the banks.

The debt problem dates back to the era of easy credit in 2006, when GHG was snapped up by a group led by South African group Netcare and private equity firm Apax.

GHG was separated out into a property company – which took on £1.65bn of gross debt and another £420m liability – and a separate services company, which offers healthcare under the BMI Healthcare banner, and is relatively debt free.

The hospital buildings have been used as collateral against the loan, meaning any default by GHG would see the hospitals taken by the lenders.

BMI Healthcare has a 29-year lease on the buildings, which means if ownership did change hands, its services offered would be unaffected, a spokesman said.