Shares of Medical Properties Trust (NYSE: MPW) nosedived more than 29% on Friday following the announcement of a plan to recover overdue rent and loan payments from Steward Health Care System.
Medical Properties Trust has noted that Steward Health Care System faces challenges in meeting its rent obligations, making only partial monthly payments. This has resulted in the accumulation of $50 million in current unpaid rent.
Medical Properties and Steward are collaborating on a plan to enable the latter to settle its overdue rent. Medical Properties Trust is also implementing measures to mitigate its exposure to the Steward Health Care System in response to rent-related issues.
Medical Properties Trust is facilitating a new $60 million bridge loan, supported by all existing company collateral, as part of the devised plans. In addition, new secondary liens will be established on Steward Health Care System’s managed care business. These same liens will extend to cover Medical Properties Trust’s $215 million in transaction-specific and working capital loans to Steward Health Care System.
Furthermore, Medical Properties Trust (NYSE: MPW) has agreed to defer unpaid rent and reduce the outstanding 2024 rent to $55 million. It expects that partial cash payments from Steward will resume in February, with a $9 million payment in the first quarter, followed by a $44 million payment in Q2.
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