The investment giant is bringing its punchy approach to restructuring – and tactics more often found in the US – to Australia as it works on the hospital group.
The owners of Healthscope, the country’s second largest privately owned hospital group, don’t want to talk about negotiations with its lenders. Everyone else does.
Observers noted the ongoing stalemate signalled that maybe Brookfield, which declined to comment, was starting to consider other options. The proposed restructure had elements of controversial restructures including Chewy, J.Crew and Serta, and even GenesisCare, which did affect local lenders cut out quickly unless they agreed to help refinance the company as part of the Chapter 11 terms.But however significant the issues are for Brookfield’s own reputation and lending syndicates in the local market, there are much bigger issues at play.
In regulatory filings, the company said while it would meet its March 31 quarterly covenants, “based on the group’s cash flow forecasts and earnings projections, and absent a recapitalisation or a modification of the terms of the facilities, the group is forecasting very limited covenant headroom with the possibility of a covenant breach during the financial forecast period”.
Evans & Partners analysts described the private hospital sectors as in “critical condition” and estimate all players – except Ramsay Health Care – are unprofitable at profit before tax.
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