Revived Funding for a Private Hospital
A state-of-the-art tertiary private hospital, with a strategic focus on cardiology, neurology and neurosurgical procedures opened in 2014.
Initial revenues were lower than anticipated due to several issues, including a delayed registration process for NHS work, general conservatism of clinicians to move their practices across and consultants’ concern that they may lose their provider-generated outpatient work. As a result, the hospital had been managing on tight liquidity and was forecasting a short-term liquidity shortfall.
FTI Consulting was engaged to assist in understanding initial revenue activity and associated challenges, as well as the hospital’s forecast liquidity position.
We prepared a medium-term financial forecast and presented it to the hospital’s financial stakeholders. We then advised the principal senior lender on their options and the appropriate terms of a consensual restructuring, particularly in relation to a new money requirement.
Outcome: New funding was successfully secured which enabled the ongoing ramp-up of the hospital to continue.
The senior lender’s position was significantly de-risked with working capital facilities repaid and ongoing debt service underwritten for the ramp-up period.