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GZO Spital Wetzikon has transitioned to a definitive debt-restructuring moratorium, lasting until June 19, 2025, to engage stakeholders in finding viable solutions. Despite ongoing operations, the proposed restructuring plan, which includes a significant debt haircut, remains unacceptable to most bondholders, risking liquidation without their approval. Shareholder communities are expected to play a crucial role in the restructuring process, with decisions on potential capital injections anticipated by mid-February 2025.
Bondholders of GZO Hospital Wetzikon oppose a proposed debt cut, while shareholder municipalities refuse to use taxpayer funds for creditor payments. The GZO Creditor Group argues that the hospital remains profitable and warns that the proposed debt restructuring is unlikely to gain necessary support, risking bankruptcy. The municipalities are assessing capital needs but maintain that any funds should not reduce the creditors' haircut.
The GZO's restructuring plan proposes a significant two-thirds write-off of creditor claims, aiming to avoid bankruptcy while addressing a substantial need for depreciation and equity injection. Bondholders express skepticism, as the estimated estate dividend for creditors is only 30-35%, raising concerns about the long-term viability of hospital financing in Switzerland. A decision on the restructuring's suitability will be made by the end of the year, with implications for the broader healthcare financing landscape.
The Clearway Capital creditors' group has expressed skepticism over GZO Spital Wetzikon's recent property valuation, which includes a write-down of up to CHF 127 million. They argue that this move is intended to intimidate creditors ahead of the crucial meeting on October 25, 2024, where the repayment of a CHF 170 million bond will be discussed. The group believes their own valuation, supported by industry experts, indicates that sufficient value exists to satisfy all creditors in the event of liquidation.
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