(Story updated at 12:00 p.m. ET)
Chinese billionaire Tianqiao Chen has purchased about 929,800 more shares of Community Health Systems, raising his stake in the troubled hospital chain to 13.8% of the shares outstanding, according to a regulatory filing Wednesday.
The bargain hunter paid $9.5 million for the shares at $10.27 per share.
The stock price of Franklin, Tenn.-based CHS traded at about $40 per share a year ago.
Chen has bought a total of nearly 4.5 million additional shares of CHS in the past month. He is the company's largest shareholder.
The filing did not indicate whether Chen is taking an activist role and looking to push management and board changes on CHS.
CHS confirmed last week that it was talking to Wall Street advisers and exploring a possible sale of the company or asset sales that could continue to reduce the size of the debt-plagued company.
Private equity group Apollo Global Management is reportedly interested in CHS' assets, as are other investors, including real estate investment trusts.
Chen, who originally made his fortune in online gambling, now owns 15.5 million shares of CHS.
Last week, he exercised buy options for an additional stake of 3.5 million shares, paying a total of $31.9 million or just over $9 on average for the shares.
CHS is plagued by $15 billion in debt that is far higher than its peers. That's despite raising $1.2 billion earlier this year through a spinoff of 38 small and rural hospitals into Quorum Health Corp., and the $445 million sale of its stake in a four-hospital joint venture in Las Vegas.
The system has suffered an earnings and stock price slump since last fall.
CHS is coming off a $1.43 billion, or $12.90 per share loss from continuing operations in the second quarter, after taking a noncash write-down of goodwill on the sinking value of hospitals it bought over the years. Excluding the one-time adjustments, adjusted EBITDA in the second quarter fell to $563 million compared with $769 million in the year-earlier quarter. Revenue also declined, by 6% to $4.6 billion.
CHS is being dragged down by the performance of hospitals acquired in 2014 as part of its blockbuster $7.6 billion purchase of troubled Health Management Associates.
During a second-quarter earnings call in August, CHS Chief Financial Officer Larry Cash said that of the 153 hospitals the company currently operates, the 61 former HMA hospitals continue to post revenue and earnings below that of its 92 legacy hospitals.
Problems are particularly acute at some of the former HMA hospitals in Florida, where CHS has tried to buttress the facilities by recruiting more physicians and putting management attention there, Cash said.
Those efforts notwithstanding, the former HMA hospitals together posted 3% declines in revenue, surgeries and admissions in the second quarter, Cash said. In contrast, the company's legacy hospitals posted 3% gains in revenue and surgeries in the quarter, even with more than a 1% decline in admissions.
CHS continues to sell hospitals beyond the Quorum divestiture. CHS has already found five buyers, including not-for-profit hospital systems, for 12 unnamed hospitals that are being sold. Those surely include some of the former HMA facilities. Cash said those sales could yield $850 million.
