LRGHealthcare's debt making it harder to find a partner, CEO says

Laconia, N.H.-based LRGHealthcare remains hopeful that it can ink a merger deal despite its high debt load, according to the Laconia Daily Sun. 

LRGHealthcare President and CEO Kevin Donovan said that the health system has had some difficulty finding a partner due to its debt. Last April, LRGHealthcare reported it had $109.7 million in long-term debt. 

"Clearly, our extreme debt load has been the issue stopping us from finding a partner," Mr. Donovan told the Sun. "Our mortgage debt alone is over $110 million today, which is twice the amount of debt an organization our size should have."

Mr. Donovan said that despite the high debt load and COVID-19 pandemic, he remains hopeful that LGRHealthcare can find a merger partner.

"Many people have assumed that the COVID-19 pandemic has stalled partnership discussions or that we've overestimated our chances," Mr. Donovan said. "That is not the case. While I cannot provide specific timing, I am optimistic we are getting close."

While Mr. Donovan declined to name the organizations he's been in talks with, officials speculate Concord (N.H.) Hospital could be one of them. The two healthcare organizations already collaborate on cardiac and maternity services. 

Although LGRHealthcare said a partnership is its best solution, it's also considered bankruptcy to restructure its debt, according to the report. 

"Individuals have mentioned bankruptcy as a potential tool to address our long-term financial issues, and it is certainly something that our board of trustees and management team have looked at," Mr. Donovan said. "Obviously, we need to explore every opportunity available."

More articles on healthcare finance:
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State-by-state breakdown of 354 rural hospitals at high risk of closing

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