Universal Health Services (UHS) will become a public hospital. According to a statement issued from the Office of the Prime Minister today, Cabinet met on Tuesday, December 5, and approved the purchase of a two-thirds stake in the private hospital.
How can the financially challenged Government purchase majority stake in the private hospital? GOB is not paying UHS any cash, but has, instead, decided to pay the hospital’s multi-million-dollar debt with the Belize Bank. That also begs the question: how will GOB pay the Belize Bank? At press time, however, no details on the financial aspects of the transaction were forthcoming. Our sources say the Lord Ashcroft bank will receive extensive real estate on San Pedro Ambergris Caye.
According to today’s Cabinet release, “Government proposes to enter an agreement to settle Universal’s debt owing to the bank in exchange for two-thirds ownership of Universal.”
UHS would have to repay GOB and also settle its existing debt with the DFC.
Despite numerous attempts, we were unable to speak with Minister of Health, Hon. Joe Coye, on the arrangement; however, Cabinet Secretary, Robert Leslie, elaborated somewhat. He said that Government wouldn’t be taking on the full debt that UHS owes, but that UHS would still have to pay a portion. When we asked for the numbers, he said that the numbers would have to be clarified.
At the public hearing of the Commission of Inquiry into the DFC, it was revealed that DFC stood to lose $29 million in the event of UHS’s total default, but the assets held as collateral were valued at $22 million. The Belize Bank has the first mortgage and the DFC the second mortgage.
According to UHS chairman, Dr. Victor Lizarraga, the UHS had originally applied for a DFC loan of $28 million, but because the DFC was not supplying the funds in a timely fashion, they had to go the Belize Bank for “bridge financing,” which would have been a temporary loan until the DFC funds came through. This was why there was the DFC guarantee, he said, because the bank would only have approved the loan with a sovereign guarantee. But according to Dr. Lizarraga, the DFC funds never came through, and so the loan stayed with the Belize Bank, which capped it at $17 million.
He said that the whole cost of the project to build the UHS hospital, located in the Coral Grove area, was about $14 million: the building cost $8 million, equipment cost $4 million and surgical supplies cost another million. $3 million from that loan went back to paying interest, he added.
Last December Lizarraga had threatened to sue the DFC:
“I’m going to sue the ‘frigging’ DFC, I’m telling you,” he had said.
“On what grounds?” we had asked
“Because they did not comply with the September 2002 agreement. It was not complied with,” Lizarraga added. “And not only that, but they knew from April last year , that there was a problem. I have correspondence to show that.
“They know that! This is not a joke! If they think they will take this make a joke, they will find out who will be responsible…”
The major shareholders in UHS are Lizarraga, Luke Espat and a group of over 20 doctors. Lizarraga declined to say what the stake of each shareholder is, but informed that he is the major shareholder, currently, in UHS.
We note that when we contacted the CEO of KHMH, Dr. Alvaro Rosado, and chairman, Israel “Pie” Marin, about the decision to amalgamate the services of UHS and KHMH, both of them said that they had not seen the proposal and are not aware of the details, but they had heard that a deal was being considered.
According to Dr. Rosado, he only learned of Tuesday’s Cabinet decision during the lunch hour today when he was listening to the mid-day news.http://www.amandala.com.bz/index.php?id=5206