CHARLOTTE, N.C., Dec. 1, 2011 /PRNewswire/ -- MedCath
Corporation (Nasdaq: MDTH) announced today it sold its ownership
interest in Harlingen Medical Center and HMC Realty, LLC to Prime
Healthcare Services ("Prime"). The execution of the purchase
agreement and closing occurred simultaneously, effective
November 30, 2011. Navigant
Capital Advisors provided advisory services to MedCath on the
transaction.
Prime acquired MedCath's 34.83% ownership in Harlingen Medical
Center and its 36.06% ownership in HMC Realty. Harlingen Medical
Center operates a 112 licensed bed general acute care hospital
located in Harlingen, Texas. HMC
Realty, LLC, a single-purpose entity, owns the real estate and
building in which Harlingen Medical Center is located and leases
the property and improvements to Harlingen Medical Center. The
transaction valued MedCath's combined ownership interest in
Harlingen Medical Center and HMC Realty, LLC at $9.0 million.
MedCath estimates that the proceeds from the sale, along with
the recapture of prior losses attributable to the operation of
Harlingen Medical Center, will result in a tax gain on the
transaction of approximately $20.4
million. As a result of the tax gain, MedCath anticipates
that net after tax proceeds from the transaction will equal
approximately $0.3 million, which is
consistent with the estimates with respect to such transactions
included in both the low end and the high end of the estimated
liquidating distributions to stockholders range set forth in the
Proxy Statement filed by MedCath with the Securities and Exchange
Commission on August 17, 2011. The
Proxy Statement contains a schedule referred to as the Estimated
Liquidating Distributions to Stockholders (the "Schedule"). The
gross proceeds from the transaction announced today, less
transaction expense, is included in the Schedule in the line item
"Proceeds from remaining sale of assets", while the tax impact from
the transaction is included in the Schedule in the line item
"Corporate income tax refunds, net". Neither Harlingen
Medical Center nor HMC Realty were a party to long-term
intercompany debt arrangements with MedCath.
This is MedCath's 12th transaction since announcing in
March 2010 it had formed a Strategic
Options Committee to consider the sale either of the entire company
or its assets. This includes sales, among others, of hospitals in
Arizona (2 hospitals),
Arkansas, Louisiana, New
Mexico, South Dakota and
Texas (3 hospitals).
About MedCath
MedCath Corporation, headquartered in Charlotte, N.C., MedCath owns an interest in
and operates one hospital with a total of 47 licensed beds, located
in California. On September 22, 2011, MedCath's stockholders
approved the liquidation and dissolution of MedCath.
SOURCE MedCath Corporation
