Healthscope landlords propose hospital break-up as not-for-profit plan stalls in Australia

Australian private hospital operator Healthscope is at the centre of a fresh ownership battle after its landlords proposed breaking up the remaining 28 hospitals across a consortium of operators, as negotiations over a rival not-for-profit restructure remain unresolved.

According to the Sydney Morning Herald, Canadian real estate investment trust Northwest Healthcare and ASX-listed HMC Capital submitted the proposal to receivers McGrathNicol on Wednesday. Under the plan, 16 hospitals would be taken on by not-for-profit operator Calvary Health Care, six by Pacific Equity Partners-backed Healthe Care, and the remainder by private operators Acurio, KnG and an unnamed party.

Calvary chief executive Damien Bruce said the proposal was designed to deliver lasting benefits to patients and staff. "Calvary has refined our proposal because we strongly believe we can deliver a solution that has genuine, sustainable benefits for the healthcare sector, those who work in it and those who access services."

KnG director Dr Anuj Gupta said her company brings relevant experience to the table. "We have deep experience in the healthcare sector and strong connections to the communities these hospitals serve. We would welcome the opportunity to work alongside clinicians and staff to support the ongoing delivery of patient care."

The break-up offer comes days after Healthscope parted ways with chief executive Tino La Spina, who had championed keeping the group intact as a not-for-profit and was publicly critical of returning any hospitals to private equity ownership. Healthscope entered receivership after Canadian buyout firm Brookfield loaded the business with excessive debt, compounded by insurer funding disputes and a decline in multi-day private patient admissions.

Read the full report for a comprehensive account of the Healthscope restructure negotiations.