Britain’s biggest private hospital operator is to hold crunch talks with its landlords about its multimillion pound rent bill, underlining the challenges facing a healthcare industry grappling with a soaring cost base.
Sky News has learnt that lenders to General Healthcare Group (GHG), which runs roughly 60 private hospitals across Britain through its division BMI Healthcare, have hired FTI Consulting to advise them on negotiations with the sites’ owners.
The talks, which are expected to take place over the next few months, will be an important milestone for GHG, which is majority owned by the South African company Netcare.
Sources said that GHG needed to secure a significant rent reduction from the separately owned property company in order to raise capital to invest back into its hospitals.
“The sites are underinvested and need to find capital that can only be freed up by slashing the rent bill,” said one source close to the situation.
The negotiations come two years after a financial restructuring of GHG, which saw the property company fall under the ownership of a group of hedge funds, of which Centerbridge is the largest.
GHG’s UK hospitals manage 1.5 million outpatient visits each year and more than 275,000 inpatient procedures, according to the company’s website.
Private healthcare providers have complained that their costs have been inflated by government measures such as the national living wage, the apprenticeship levy and other factors such as the fall in the value of sterling.
On Tuesday, Four Seasons, the care home giant, said it was proposing a financial restructuring that would include rebasing some of its leasehold rents.
GHG could not be reached for comment.
Source: Sky News