RANDOLPH HEALTH — A Randolph County leader said the deal to sell and preserve the county’s main hospital and primary health care system moved much closer to becoming reality after a state commission signed off on a loan agreement Tuesday afternoon.
The N.C. Local Government Commission approved a $12 million state rural hospital stabilization loan for Randolph Health, which has struggled financially in recent years. Randolph County Board of Commissioners Chairman Darrell Frye told The High Point Enterprise that he was “very pleased” with the decision.
The $12 million for the Randolph Health merger would essentially serve as a bridge loan helping financially with transition to a new owner, California-based American Health Care Systems. The purchase includes Randolph Hospital in Asheboro, which also is one of the county’s top employers.
The Randolph Health loan is through the state Rural Health Care Stabilization Act. The N.C. General Assembly created the hospital loan fund to help preserve smaller medical centers in rural parts of the state.
The loan amount originally was for $20 million, but Randolph County revised it downward recently to $12 million. The county, through the Randolph County Board of Commissioners, applied for the loan on behalf of Randolph Health.
Frye told The Enterprise that he doesn’t believe the Local Government Commission would have approved the loan at the higher $20 million amount. The commission is part of the N.C. Department of State Treasurer in Raleigh.
The commission had several conditions for approving the loan. They include:
- Having a third party conduct a sustainability study to ensure the hospital would remain viable under American Health Care Systems.
- Requiring the Randolph County Board of Commissioners to have at least two representatives with full voting rights on the future hospital board.
- Ensuring Randolph County would have security interests in their loan to protect county taxpayers.
The proposed Randolph Health merger has to clear one other state regulatory hurdle. The proposal has to be signed off by N.C. Attorney General Josh Stein.
“Our review of the transaction is ongoing,” said Laura Brewer, public information officer for the state Attorney General’s Office.
Frye said the N.C. Attorney General’s Office has to approve the sale of a nonprofit, such as Randolph Health, to a for-profit enterprise.
Randolph Health officials, who previously expected to conclude the sale to American Health Care Systems this spring, now expect a finalized deal in early summer, according to a memorandum sent to employees.
“While there is still work to do, we are moving ever closer to finalizing the transaction,” wrote Louis Robichaux IV, Randolph Health chief restructuring officer. “We are all very eager to reach a conclusion to this process and move forward with our new partner.”
Randolph Health officials have been candid in saying the deteriorating financial position of the health system requires a merger or financial partner.
In October, American Healthcare Systems agreed to purchase Randolph Health in a deal signed off on by the bankruptcy court. Randolph Health filed for a reorganizational bankruptcy in March 2020.
firstname.lastname@example.org | 336-888-3528 | @HPEpaul