BJC Medical Center may have found the white knight to rescue it from its financial difficulties.
The Commerce-based facility announced Tuesday that it has entered a letter of intent with Restoration Healthcare, a Tennessee-based operator of hospitals, that could lead to the sale of BJC Medical Center.
A news release issued Tuesday said Restoration Healthcare has held preliminary meetings with local physicians who have expressed interest in developing a joint venture at BJC.
The news release quoted Steve Clapp, president of Restoration Healthcare, as saying, “We, in partnership with the outstanding physicians, will work hard to make BJC the hospital and nursing home of choice for citizens in Banks, Jackson and surrounding counties.”
Restoration Healthcare operates each of its hospital locally in a joint venture with local and regional physicians, according to the news release.
The letter of intent is nonbinding. It opens the way for Restoration Healthcare to begin its “due diligence” review of the hospital and nursing home, and the parties will also begin negotiating a formal definitive and binding agreement covering the details of the transaction.
Should those negotiations bear fruit, the transaction will be subject to approval by the attorney general. Both parties hope to finalize the deal this year.
“The parties hope to file with the attorney general’s office early this fall, with a closing in the fourth quarter of the year,” the news release stated. “The new owners will offer employment to the current employees at their current level of seniority with comparable benefits.”
The weak economy has devastated the medical center, which recently asked the boards of commissioners of Jackson and Banks counties to finance an additional $3.7 million in bonds to cover short-term debts and to guarantee a $1 million line of credit — in addition to the bond payments they’re already making.
For more than a year, the medical center has sought “partners” to enable it to remain viable. Among the requirements, BJC officials have long said, is a commitment to the construction of a new hospital, but CEO Jim Yarborough says the authority has “backed off” that requirement due to the economy.
“Their (the board’s) anticipation is that in the future there will be a new hospital by a new entity, but it is not an obligation thus far in the letter of intent, and I do not think the intent is to have that requirement (in the binding contract),” he said.
Yarborough said the feeling of the BJC Medical Center Authority is that “it is not reasonable to put that requirement on someone in the very short term.”
If the deal is consummated, proceeds from the transaction would be used to cover any outstanding liabilities, including bonds being funded by Jackson and Banks counties. The remaining proceeds would be placed in a trust and used to cover some of the charity care provided at the hospital, as required by Georgia law, the news release said.
BJC Medical Center signed a similar nonbinding letter of intent last November with a new group, Doctors Hospital of Georgia. Negotiations fell through as the group could not muster financial support.
