Steward successfully secures $225 million in financing despite ongoing bankruptcy proceedings

Steward Health Care secures $225m financing to sustain hospital operations amid bankruptcy proceedings

Steward Health Care, a US-based integrated value-based healthcare system, has secured $225 million in additional financing commitments to support its hospital operations following a recent bankruptcy filing. The company is set to seek court approval for this financial support at the US Bankruptcy Court for the Southern District of Texas later this week.

The financing, provided by a group of Steward’s secured First-in, Last-out (FILO) lenders, is crucial for the company’s continuity. It will allow Steward Health Care to navigate its strategic marketing process effectively, with the goal of maximizing value for all stakeholders, including vendors and creditors, during the bidding for the sale of Stewardship Health, pending regulatory approval.

The debtor-in-possession (DIP) financing facility offers Steward Health Care the flexibility to extend the marketing process if it benefits the company’s stakeholders. This could involve reorganizing around certain assets to ensure the selection of the most advantageous bidder and maximize creditor value.

Legal counsel for the company is provided by Weil, Gotshal & Manges, with financial advisory services from AlixPartners, led by John Castellano as the chief restructuring officer. Investment banking services are being handled by Lazard Frères & Co., Leerink Partners, and Cain Brothers, a division of KeyBanc Capital Markets.

The cash injection was deemed necessary after Medical Properties Trust, the hospital landlord, declined to provide more than an initial $75 million Chapter 11 loan, as reported by Bloomberg. Steward Health Care CEO Dr. Ralph de la Torre expressed gratitude for the additional financing, stating that it provides the company with a long runway to stabilize operations for the benefit of all stakeholders.

Steward Health Care filed for bankruptcy protection on May 6 and announced plans to sell all 31 of its hospitals in the US to address its $9 billion in total liabilities. The company’s efforts to secure financing amidst bankruptcy proceedings demonstrate its commitment to maintaining operations and serving its community.

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