The Sierra Kings Health Care District Board in Reedley, Calif., has unanimously approved a letter of intent to join Adventist Health.
Sierra Kings moves to join Adventist
The agreement would allow the 44-bed Sierra Kings District Hospital and its five rural clinics to stay open and emerge from bankruptcy protection, filed in 2009. The facilities would join not-for-profit Adventist Health/Central Valley Network, serving California's Central Valley.
The deal includes a 15-year lease of $800,000 annually, subject to an increase adjustment, with a term value of $12 million. Also included is the purchase of the rural health clinics for $4.6 million and equipment for $3.7 million, plus about $4.5 million in adjusted working capital currently on the district's balance sheet. Some of the proceeds would be used to retire the district's revenue bonds, at about $7.5 million, and the rest would go toward outstanding claims in the district's Chapter 9 bankruptcy, according to a news release.
The board of Roseville, Calif.-based Adventist Health and the healthcare district must next approve a final agreement. Then, district voters will decide on the ballot initiative at a June 7 special election. The deal is also subject to customary regulatory approval.
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