With an investment of more than one billion yuan, large private hospitals have applied for bankruptcy reorganization!

Another large private hospital will be bankrupt and reorganized!

Editor| Zhao Xiaohua

Source| Medical Community (ID: vistamed)

Fuyang Minsheng Hospital applied for bankruptcy reorganization

Recently, the Intermediate People's Court of Fuyang City, Anhui Province, issued an announcement saying that according to the hospital's application, the court has ruled on March 24 this year to accept the bankruptcy reorganization case of Fuyang Minsheng Hospital.

It is understood that Fuyang Minsheng Hospital was founded in 2015 and officially opened in May 2018, is a non-profit tertiary general hospital, the hospital covers an area of more than 100 acres, construction area of nearly 160,000 square meters, set up 1260 beds, a total investment of 1.05 billion yuan, for the Fuyang Municipal Government "13th Five-Year Plan" key construction projects.

It is reported that after the announcement was released, Fuyang Minsheng Hospital has received a lot of attention from all walks of life, and even many patients and netizens are more concerned about whether the hospital is still open normally. In response, the hospital issued an announcement on the evening of April 26 to explain.

According to reports, according to the relevant legal interpretations, the purpose of the bankruptcy reorganization procedure is to rescue debtors who are in deep difficulties and realize the reconstruction of enterprises, which refers to the reconstruction system in which enterprises are unable to repay their debts and follow the procedures prescribed by law to protect enterprises from continuing to operate, realize debt restructuring and enterprise adjustment, and get them out of difficulties and move toward rejuvenation.

Therefore, during the bankruptcy reorganization of Fuyang Minsheng Hospital, all medical diagnosis and treatment services were carried out normally. At the same time, the hospital also said that the bankruptcy reorganization aims to rebirth nirvana, promote the hospital to enter sustainable and healthy development, and better provide high-quality medical services for the people of Fucheng.

It is reported that shortly after the application for bankruptcy reorganization was accepted, Fuyang Minsheng Hospital also invested in the front-line epidemic prevention and control work as usual, since April 5, as of April 10, the hospital has sent a total of 563 nucleic acid collection medical personnel, and the number of samples completed is nearly 400,000.

In 2021, when the epidemic is normalized, the hospital not only added pain and psychiatric outpatient clinics, general medicine departments and molecular biological genetic testing projects, but also newly established the third ward of the oncology department, and its general surgery, orthopedics, and hand and foot surgery have also carried out difficult and complex surgeries.

From the hospital's official website, it was found that Fuyang Minsheng Hospital has another name, that is, Wuhan Asian Heart Hospital Fuyang Hospital.

Source: Fuyang Minsheng Hospital official website

According to Fuyang Daily, a person in charge of hospital discipline construction once said that the hospital had signed a 30-year strategic cooperation agreement with Wuhan Asian Heart Hospital before its construction. According to the agreement, about 200 of the more than 600 beds set up in the first phase of the hospital will be used for the diagnosis and treatment of heart disease. In June 2017, the hospital also selected the first batch of nearly 40 newly recruited medical staff to wuhan Asian Heart Hospital for training.

Not only that, according to Fuyang Minsheng Hospital, the hospital has also cooperated with the expert team of Wuhan Asian Heart Hospital, Anhui Provincial Cancer Hospital, Nanjing Military Region General Hospital, and with the support of expert teams in Beijing and Hefei, to establish four major diagnosis and treatment centers for heart disease, oncology, kidney disease diagnosis and treatment and dialysis, and entolaryngology head and neck surgery.

Perhaps many people wonder why such a large regional private hospital with an investment of hundreds of millions of dollars and a bed scale of more than 1,000 beds suddenly applied for bankruptcy and reorganization less than 4 years after opening.

Cash is tight

According to people's information, a relevant person in charge of the hospital once said that the hospital operated well in the first year of operation, but the good times were not long, and after 2019, it fell into difficulties due to lack of funds.

According to some legal ruling documents, in March and May 2019, due to the need for capital turnover, Fuyang Minsheng Hospital had borrowed a total of 22 million yuan from the same enterprise and agreed to pay interest at an annual interest rate of 12%; in November of the same year, the hospital borrowed millions of yuan from another company, calculated at an annual interest rate of 12%, for the payment of the debts owed to the financial leasing company, but due to the hospital's shortage of funds, it was unable to repay the debts on time, triggering litigation.

"Invested more than a billion yuan, the late working capital is not in place, the court has seized the hospital's account, some of the funds are due for repayment, plus some infrastructure project funds, the number of patients treated since the epidemic has decreased, and the operation was once at a loss," said a relevant person in charge of the hospital.

In fact, in the face of a funding gap, hospitals have not thought of asking for help. In February 2020, Fuyang Minsheng Hospital applied to the leaders of the Anhui Provincial Party Committee through the People's Network leadership message board to request a coordinated project loan.

According to reports, in 2017, the Anhui Branch of the Industrial and Commercial Bank of China and the Anhui Branch of the Bank of China plan to invest 600 million yuan in 10-year syndicated project loans to Fuyang Minsheng Hospital. However, in late April 2019, the loan approval process was temporarily shelved due to the hospital's cooperation with the organization of the investigation. In August of the same year, after the organizational investigation was concluded and a clear conclusion was reached, the court subsequently applied to the above two banks several times to restart the loan procedure, but there was no response for a long time.

Since entering January 2020, in order to cooperate with the city's epidemic prevention and control work, the hospital has suspended some diagnosis and treatment activities, and its income has also dropped significantly, with almost no medical income and huge economic pressure. Funds are scarce, operations cannot be guaranteed, and it is inevitable that hospital development will fall into difficulties.

Based on this, Fuyang Minsheng Hospital hopes to restart the above 600 million yuan 10-year project loan to help the hospital tide over the difficulties.

So, how did the Anhui Banking and Insurance Regulatory Bureau reply?

It is understood that in August 2018, the actual controller of the hospital, Ding X, borrowed 600 million yuan from the above two banks with Fuyang Minsheng Hospital as the main body, and in January 2019, the two banks formed a syndicate, and ICBC as the lead bank, in April of the same year, the syndicated lead bank learned at the loan review stage that the actual controller and the investor Ding X had a major emergency, and there was uncertainty in the business prospects, triggering a major risk warning mechanism for the bank to be granted credit.

In May 2019, the syndicate took the lead in terminating the loan review of the Fuyang Minsheng Hospital project. During the epidemic period, the financial staff of Minsheng Hospital consulted the Fuyang Branch of ICBC on the relevant policies of the working capital loan for epidemic prevention and control, and ICBC replied in combination with the policy requirements.

In addition, the Anhui Banking and Insurance Regulatory Bureau also said that in the next step, it will urge financial institutions such as ICBC and Bank of China to keep abreast of the latest situation of borrowers and their actual controllers, and actively help enterprises get out of difficulties under the premise of meeting relevant policy requirements.

Bankruptcy reorganization or another kind of rebirth

In fact, according to the "Medical Community", for private hospitals that hope to be reborn through bankruptcy, Fuyang Minsheng Hospital is not an isolated case, and there have been successful cases before.

In October 2021, a notice issued by the Muchuan County People's Court mentioned that Muchuan Traditional Chinese Medicine Hospital was reborn through bankruptcy reorganization, which was the first private hospital in Sichuan Province to be reborn through bankruptcy reorganization procedures. This also provides a reference for some private hospitals in distress to get out of the quagmire.

It is reported that the hospital has a total investment of 112 million yuan and a construction area of 28,000 square meters, which was put into operation in October 2018 and is a private secondary hospital. After 3 years of operation, poor management and the impact of the epidemic, the hospital is facing great difficulties in survival, and the people's livelihood project that is supposed to improve the medical capacity of the county has become a "people's grievance project".

In September 2020, Muchuan Traditional Chinese Medicine Hospital applied to the Muchuan Court for reorganization on the grounds that it was unable to pay off its debts as they fell due, suffered serious losses in operation, and owed employees wages for a long time, but still had potential restructuring value and hope. After the Muchuan court ruled and accepted the case, 123 people successively declared their claims, with a total of 194 million yuan.

For some private hospitals in debt distress, bankruptcy reorganization may be another rebirth, so can Fuyang Minsheng Hospital usher in new opportunities for development through bankruptcy reorganization? "Seeing the Medical Community" will continue to pay attention. (This article is published by "Seeing the Medical Community", reprinted with permission, and the author and source are indicated at the beginning of the article.) ）

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