Orovillle (Calif.) Hospital, which is nearing the completion of a controversial $178 million capital project, is requesting four separate waivers as it struggles to maintain certain debt obligations, according to a Nov. 7 filing.
In a slide presentation, the nonprofit system said it had failed to maintain debt service requirements as of Nov. 30 and May 31. At the same time, it had less than a required 60 days' cash on hand as of May 31 and had under $5 million on deposit with one of its banks.
The noncompliance with days' cash on hand covenant is expected to continue in the first six months of fiscal 2024, the hospital said. Debt service coverage could be back in compliance by the end of 2023.
The system's net debt as of August 2023 totaled $237.5 million. Its operating income for the third quarter of 2023 was $7.5 million.
Oroville Hospital is expected to complete the five-story hospital expansion by the end of the year. The system, which requested to have an S&P rating removed Nov. 7, has received criticism over doubts it can pay in full for the project.