Aniket Pujari(Bloomberg) — A California hospital about 70 miles north of Sacramento filed for Chapter 11 bankruptcy Monday after failing to sell itself or secure an affiliation with a larger hospital system.
The nonprofit Oroville Hospital has been struggling to pay $193 million of outstanding municipal debt used to finance a new tower. The construction of the facility was completed in March but its opening was delayed as the hospital awaits state approvals, according to a local news report.
“We believe this filing is an important step toward securing the hospital’s long-term future as a vital healthcare provider and employer in our community,” the hospital said in a statement. “The purpose of the filing is to facilitate a court-supervised transaction with a partner that has the resources and operating experience to invest in the hospital and maintain its mission for the benefit of all our stakeholders.”
Oroville Hospital issued about $196 million of municipal debt in 2019 to expand the 133-bed facility to 211 beds. Oroville Hospital bonds last traded at 74 cents on the dollar on Nov. 17.
Operating since 1962, the hospital said its facilities will remain open during the bankruptcy process. Oroville Hospital also operates 31 clinics in Butte County.
The hospital has retained Cain Brothers, a health-care investment banking firm and KeyBanc Capital Markets division, to advise it on selecting an affiliation partner. FTI Consulting is serving as financial adviser.
The case is Oroville Hospital, number 25-26876, in the US Bankruptcy Court in the Eastern District of California.
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