Spire Healthcare sells freehold assets of Cheshire Hospital for £89m

Private hospital group Spire Healthcare has agreed terms to sell the freehold assets of Spire Cheshire to NWI Jersey for £89m in cash.

Spire said it will continue to operate the hospital and will lease the property at an initial rent of £3.8m, with annual rent inflation linked to CPI and capped at 4%.

Net proceeds after deal costs and applicable taxes are expected to be £85m. In FY22, Spire Healthcare's lease liabilities under IFRS 16 will increase by £56m to approximately £800m, and net finance costs will rise by £3m with negligible impact to depreciation, it said.

Spire Cheshire is a medium-sized hospital comprising 46 beds, three main theatres and a minor operations room. The hospital generates an EBITDA margin in line with the group average and Spire said the transaction will have no impact on the operation of the hospital or patient care.

"The sale proceeds will be used to provide financial flexibility for post Covid opportunities, and an improved cash position while Covid -19 uncertainty continues and the company undertakes to re-finance its existing bank debt in 2022, which is due to mature in mid-2023," Spire said.