MedCath (NASDAQ:MDTH) has sold its stake in a Texas hospital, leaving the dissolving hospital operator with just one facility left.
Charlotte, North Carolina-based MedCath sold its minority ownership in the 112-bed, acute care Harlingen Medical Center to Prime Healthcare Services, a California hospital operator. The transaction closed on Wednesday. MedCath also sold its stake in HMC Realty, which owns the property and the building where the Harlingen Medical Center operates. The total value of both deals is $9 million.
MedCath had a hospital portfolio focused on cardiac care. But the company, which has been losing money since 2008, decided to sell those assets as part of a liquidation process that initially began in the spring of 2010 as a restructuring. MedCath disclosed in May that it was preparing to dissolve as a company. The company has since sold hospital assets throughout the country, including facilities in North Carolina, Arizona and Arkansas. On Sep. 23, MedCath shareholders approved the liquidation and dissolution of the company. With the sale of the Harlingen facility, MedCath’s only remaining facility is a California hospital with a total of 47 licensed beds.
MedCath estimates that proceeds from the sale of the Harlingen facility, along with the recapturing of prior losses attributed to that hospital, will result in a tax gain of about $20.4 million. After-tax proceeds will be roughly $300,000, which is consistent with estimates that MedCath outlined in a recent proxy statement.
