Published on 2 Apr 2024 on Zacks via Yahoo Finance

Tenet (THC) Divests Six Hospitals, Sustains Divestiture Spree

Tenet Healthcare Corporation THC recently closed the divestitures of six hospitals and related operations based in California. Out of the total, four facilities and their related operations are located in Orange County and Los Angeles County, and have been divested to the academic health system of Orange County, UCI Health.

An agreement for the sale of the facilities, named Fountain Valley Regional Hospital, Lakewood Regional Medical Center, Los Alamitos Medical and Placentia-Linda Hospital, was inked at the very beginning of February 2024 after receiving a nod from the University of California Board of Regents. The transaction was likely to conclude in the spring of 2024, subject to customary regulatory approvals, clearances and closing conditions, and the divestiture was completed within the targeted period.

Tenet Healthcare is expected to receive proceeds of roughly $975 million, or approximately $800 million after-tax, out of the abovementioned transaction. It will support THC in paying off its debts. The company grappled with a significant long-term debt burden of $14.9 billion as of Dec 31, 2023, and interest expenses increased 1.2% year over year in 2023, thereby affecting THC’s profit levels.