US company that operates private Beacon Hospital suffers €5m loss
Published 07/04/2011 | 05:00
The company that operates the UPMC Beacon Hospital in Sandyford in Dublin suffered losses of €5m in the 10 months to the end of June, according to accounts filed with the Companies Office.
The loss came as running costs of €8.25m hugely outstripped the private hospital's €6.6m turnover.
The results are the first since US investor UPMC, part of the University of Pittsburgh, invested €25m to take control of the hospital-operating business back in 2009.
Under that deal, the US not-for-profit investor will pump another €43m into the business in the coming years, taking total investment to €68m.
The hospital was built at a cost of around €176m, and is leased from the original developers.
UPMC bought its majority stake after the company had already been managing the facility for two years. The investment facilitated a restructuring of the hospital operator's banks debt, with lenders agreeing to spread out the life of existing loans and re-price the debt, which had been in default and at risk of being called in.
The hospital's original backers were led by businessmen Michael Cullen, Paddy Shovlin, John Delaney and consultant Mark Redmond.
They retain a minority stake in the company and a right to sell out of the business in 2016 under an "out and call" option.
The "call" means the company will have to buy the investors out for €107m, and that figure is recorded as a liability in the company accounts.
Total financial debt, including €30m of bank loans is €159.5m, the majority relates to the call option.
In common with other private hospital developments, the facility was originally built taking advantage of tax breaks introduced in 2001 and 2002.
The tax breaks allowed investors in private medical facilities to claw back 40pc of what they invested in their construction.
In its latest set of accounts the original investors are referred to as the Tax Investor Group.