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Steward announces ‘significant’ funding to stabilize health care company, keep hospitals open

BOSTON — Steward Health Care on Friday announced that the company has agreed to terms of a “significant financial transaction” that will help keep its Massachusetts hospitals open and allow the company time to consider transferring some of its medical centers to other companies.

“This funding will help stabilize operations, including the resumption of virtually all elective cases, and more importantly allows us to continue operations at all of our Massachusetts hospitals,” Steward Executive Vice President Dr. Michael Callum said in a memo to the company’s Massachusetts employees. “To be clear, we have no current plans to close any of our hospitals in Massachusetts.”

News of the bridge financing came amid Steward’s financial crisis, which has resulted in surgeries and procedures performed by Mass General Brigham doctors at Holy Family Hospital having been postponed days after the president of the hospital stepped down.

The hospital chain is $50 million behind on rent, according to Rep. Stephen Lynch, and looking to sell all nine remaining Massachusetts hospitals, but most urgently Holy Family, Nashoba Valley, St. Elizabeth’s and Norwood Hospital.

Steward earlier told Boston 25 News in a statement that its struggles are in part due to pandemic challenges and unfair Medicare and Medicaid reimbursement rates.

In his memo to employees, Callum said the “bridge financing and the terms of this transaction have been agreed upon and the first tranche of funding is imminent.”

The company is “advanced in an M&A process that would bring in a significant equity partner to our physician organization,” he said, and Steward has “already received very significant bids as part of this process.”

Hospitals at risk of closing? Steward Health Care reportedly owes $50M in back rent

The bridge financing will get Steward to “the closing of the M&A process, and will provide the necessary capital for a robust national physician group and the time needed for Steward to consider transferring one or more of our hospitals to other operators,” he said.

“We are confident that both transactions will provide us with the necessary funds to get us through this challenging time,” Callum said. “In the meantime, we remain dedicated to serving the Commonwealth and the patients in our communities.”

This is a developing story. Check back for updates as more information becomes available.

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