Steward snags $225M safety net for hospitals

Dallas-based Steward Health Care has snagged an additional $225 million loan commitment from a group of lenders to keep its 31-hospitals and physician group, Stewardship Health, operational ahead of auction.

Steward, which filed for bankruptcy May 6, will now seek approval from the U.S. Bankruptcy Court for the Southern District of Texas for the financing, according to a June 10 Steward news release obtained by Becker's.

The lenders are a group of "Steward's secured FILO lenders," the release said, and include WhiteHawk Finance, Owl Creek Investments, OneIM, MidOcean and Brigade Capital Management, a spokesperson from Steward confirmed with Becker's

The health system was forced to seek additional funding after Medical Properties Trust, Steward's landlord, shared in early May that it could not provide Steward more than $75 million in debtor-in-possession financing to help with sustaining patient care while it looked for new hospital operators. 

U.S. Bankruptcy Judge Chris Lopez gave the green light for Steward to sell its hospitals and its physician group, Stewardship Health, during a June 3 hearing. 

The first round of hospitals — which exclude Steward's Florida facilities and certain Texas hospitals — and Stewardship Health have a June 24 bid deadline and July 11 first sale hearing. 

Steward's Florida hospitals and four Texas facilities are part of the second round sale, with an Aug. 12 bid deadline and Aug. 22 sale hearing. 

Mr. Lopez also approved Steward's motion to provide a potential financier with incentives, which include a minimum of $6.75 million in a "commitment fee."

Editor's note: This story has been updated as of 10:10 a.m. CT on June 13.

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