Health Management Associates, Naples, Fla., said that it could raise as much as $400 million in cash this year from hospital sales and sales of minority stakes to strategic buyers, using the cash to pay down debt. That was among the strategies for the next two years that the company revealed as it discussed its 2007 year-end results with stock analysts on a conference call.
Burke Whitman, president and chief executive officer of HMA, said it was more likely than not that the company would announce some deals in the first half of this year. Whitman did not provide any hints as to the hospitals or the buyers involved in the deals under discussion. In answering a question about the prices that HMA expects to get for its hospitals, Whitman did note the sale of two Virginia hospitals last year to Wellmont Health System, Kingsport, Tenn. Whitman did not mention Wellmont by name but described it as a well-placed local system able to take strategic advantage of those two hospitals. The selling of minority stakes is likely to be with physicians, as the company continues to look for both whole-hospital and outpatient joint ventures with physicians.
HMA said it earned $12.5 million in the fourth quarter, reversing a $56.2 million loss in the year-ago quarter that was mostly because of a $200 million increase in its reserves for bad debts. Revenue increased 4.9% to $1.1 billion. For 2007, profits were $119.9 million, down a third from profits of $182.7 million in 2006. Revenue increased 8.4% to $4.39 billion. -- by Vince Galloro
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