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HMC lender extends financing until Nov. 10



The lender for bankrupt Hawaii Medical Center agreed to extend financing for ongoing operations through Nov. 10 — the deadline for which a buyer is required to sign a letter of intent to purchase one, or both, of HMC’s hospitals in Liliha and Ewa.

MidCap Financial has been funding operations of the money-losing hospitals since June, but is now requiring a buyer be secured or the hospitals closed.

There are at least half a dozen potential buyers that are seriously considering the assets and at least one has put down the required $250,000 deposit, according to Maria Kostylo, HMC’s CEO.

Hawaii Pacific Health, owner of Kapiolani and Straub hospitals, is among  the potential buyers considering all or parts of HMC. Hawaii Pacific Health singled out last week its interest in HMC’s newer Ewa hospital, which opened in 1990.

If no buyer steps forward, HMC could be forced to close and lay off its 990 employees.

St. Francis Healthcare System of Hawaii, the facilities’ former owner, announced in late October it was pulling out of a bankruptcy reorganization plan that would’ve returned the facilities to the Roman Catholic religious order.

St. Francis sold the hospitals in January 2007 for $68 million to HMC LLC, then a joint venture between Hawaii Physician Group LLC, comprised of local doctors, and Kansas-based Cardiovascular Hospitals of America. St. Francis provided the bulk of the financing for the sale — $40.2 million — and is HMC’s main creditor.

The 240-bed HMC-East in Liliha has about 80 patients, and the 102-bed HMC West in Ewa had 70, as of today, Kostylo said.

HMC filed for Chapter 11 bankruptcy protection in August 2008. It emerged in August 2010 and filed again in June.


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