CHS to sell off more hospitals this year
- Community Health Services will continue to shed hospitals in 2018 in an effort to further reduce debt and focus on sustainable hospitals in growth markets, CEO Wayne Smith told investors Wednesday at the J.P. Morgan Healthcare Conference in San Francisco.
- The Franklin, Tenn.-based hospital operator, which reeled in $2 billion last year on the sale of 30 hospitals, hopes to net another $2 billion by selling off additional assets in the year ahead.
- Meanwhile, Chinese investor Tianqiao Chen, through the Shanda Group, purchased more than $36 million worth of CHS shares over the past month, raising his equity stake to about 27.5 million shares or 24% of the company, a Securities and Exchange Commission filing shows.
On divesting more hospitals, Smith said his goal is to have “theoretically around 100 hospitals that are in significantly improved markets.” CHS currently owns 125 hospitals.
CHS has been struggling with about $15 billion in debt and disclosed in 2016 that it would look into selling up to 30 hospitals to bring that figure under control. Its financial woes started with the $7.6 billion purchase of Health Management Associates in 2014. HMA, which owned 23 hospitals and some clinics in Florida, was experiencing fiscal troubles of its own at the time of the sale.
In 2016, CHS spun off 38 hospitals into an independent company called Quorum Health and sold its share in a four-hospital joint venture. The company ended the third quarter of fiscal 2017 with a net loss of $110 million on about $3.7 billion in revenue.
Thomas Aaron, chief financial officer at CHS, told J.P. Morgan attendees that the goal is to rid the company of more debt before November, when the next round of senior notes mature. In the third quarter, CHS’ debt totaled $13.8 billion, down from $14.8 billion the in Q2.
- Community Health Systems J.P. Morgan Healthcare Conference http://www.chs.net/investor-relations/investor-tools/jp-morgan-healthcare-conference/
- Modern Healthcare J.P. Morgan Healthcare Conference Day 3 Notebook
- Becker's Hospital CFO Report Chinese billionaire boosts stake in CHS to 24%, continues to support company’s turnaround plan