Southern Health Corporation of Houston has entered a revised agreement for the sale of Trace Regional Hospital and three patient clinics to Progressive Health of Houston.
Southern Health is an indirect subsidiary of US-based health services provider SunLink Health Systems.
As part of an asset purchase agreement, Southern Health already sold certain personal and intangible assets to Progressive Health for $500,000 and also signed a six-month net lease of certain hospital real property at $20,000 per month.
In addition, Southern Health reached a management agreement with Progressive Health to manage the operations of the hospital and clinics until regulatory approvals are obtained.
The initial agreement between Southern Health and Progressive Health to acquire Trace Regional Medical Center and three patient clinics in Chickasaw County, Mississippi, US, was signed in November last year.
It has now been scrapped in light of the new terms.
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Southern Health will also sell some of the real estate assets of Trace to Progressive Health by 31 July 2024, as part of a $2m real estate purchase agreement.
According to SunLink Health Systems, the transaction to sell Trace Regional Hospital and its real estate assets is expected to result in an aggregate loss ranging from $1.8-2.2m.
The exact loss is yet to be ascertained by the company.
To determine an accurate amount, the company is waiting for a detailed analysis of the costs associated with the property sold by Trace Hospital and retained by Trace Extended Care & Rehabilitation, as the two operations have been operated as one facility for a long time.
Trace Extended Care & Rehabilitation is a skilled care nursing facility located near the campus of Trace Hospital.
SunLink Health Systems, the parent company, oversees various subsidiaries that manage healthcare properties and businesses in the Southeast US.
Each subsidiary operates locally, aiming to connect patients with healthcare professionals.