Tenet Healthcare Corp., Dallas, disparaged a stock analysts report that predicted that the company was susceptible to bankruptcy in the next three years if the factors dragging down hospital company profits dont turn around. The company issued a news release in response to a report by Ken Weakley, who recently moved to Credit Suisse Securities. As an analyst with UBS, Weakley was the first to question Tenets heavy reliance on Medicare outlier payments in research published in October 2002.
Tenet said in its news release that the company had $675 million in cash on hand and has access to a $500 million line of credit, both as of June 30. The company said it expects that the cash and credit will be enough to fund the company as it continues its turnaround efforts. Should those funds not be sufficient, Tenet said, the company could tap the credit markets using our asset base. In a follow-up research note, Weakley interpreted that statement as referring to a sale-leaseback transaction, in which the land and buildings of a hospital are sold to a real estate investment trust.
Another stock analyst, Darren Lehrich of Deutsche Bank, upgraded the company to hold from sell this week. -- by Vince Galloro
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