(Bloomberg) -- Healthscope Ltd., an Australian hospital operator, received a covenant waiver from lenders on a A$1.6 billion ($1.1 billion) loan to give the firm more time to negotiate higher reimbursements from health insurers, according to people familiar with the matter.
The waiver will help pre-empt any possible breach of the loan agreement as Healthscope, owned by Brookfield Asset Management, grapples with lower earnings. Lenders have agreed to waive the covenant until the end of March 2025, the people said who asked not to be identified as the matter is private.
Representatives of Healthscope and Brookfield declined to comment.
Healthscope is struggling with rising medical costs and getting insurers to reimburse higher fees amid sticky inflation in Australia. The firm started talks with lenders in March to restructure the loan, including a proposal to reorganize the hospital operator’s holding company and collateral for the facility, people familiar with the matter said earlier this year.
The loan in question matures in June 2027, according to Bloomberg-compiled data. Lenders include major Australian and Asian banks as well as private credit funds.
©2024 Bloomberg L.P.