CHARLOTTE, N.C., May 5, 2011 /PRNewswire/ -- MedCath Corporation (Nasdaq: MDTH) announced today it has completed the sale of the majority of the assets of its MedCath Partners division to DLP Healthcare, a joint venture of LifePoint Hospitals and Duke University Health System. The transaction valued the assets acquired at $25.0 million and involved the sale of certain North Carolina-based assets related to the operation of cardiac catheterization laboratories in North Carolina. MedCath will retain working capital related to the assets sold and will also retain assets related to cath labs leased to two health care systems outside of North Carolina as well as its minority ownership in one North Carolina joint venture. Further, MedCath will retain certain assets and liabilities arising from this business that arose before closing. "MedCath Partners has been an integral component of MedCath since the inception of MedCath in 1988," said O. Edwin French, MedCath's president and chief executive officer. "We're proud of MedCath Partners' history of helping provide cardiovascular care in partnership with physicians and hospitals, and we wish the buyer of this portion of the division the best in its endeavors." MedCath anticipates that it will receive approximately $16.0 million from the transaction, after collection of related retained accounts receivable and payment of known liabilities, closing costs and taxes. MedCath intends to use the net proceeds, along with available cash, to repay all outstanding amounts owed under its bank facility and terminate the facility, which matures in November 2011. As of March 31, 2011, MedCath owed $30.2 million in borrowings under the facility. About MedCath MedCath Corporation, headquartered in Charlotte, N.C., is a healthcare provider focused on high acuity services with the diagnosis and treatment of cardiovascular disease being a primary service offering. MedCath owns an interest in and operates six hospitals with a total of 533 licensed beds, located in Arizona, Arkansas, California, Louisiana, New Mexico and Texas. Parts of this announcement contain forward-looking statements that involve risks and uncertainties, including those relating to the sale of certain assets of our MedCath Partners division, the amount of cash proceeds MedCath may receive from the sale of the MedCath Partners assets, the use of those proceeds and potential unknown liabilities associated with the pre-closing period that will remain the responsibility of the MedCath subsidiary that owned such assets. Although MedCath's management believes that these forward-looking statements are based on reasonable assumptions, these assumptions are inherently subject to various risks that are difficult or impossible to predict accurately and, in some cases, are beyond MedCath's control. Actual results could differ materially from those projected in these forward-looking statements. MedCath assumes no obligation to update these statements in a news release or otherwise should material facts or circumstances change in ways that would affect their accuracy.
Shares of MedCath Corporation (Nasdaq:MDTH) were gapping down Friday morning with an open price 47.9% lower than Thursday's closing price. The stock closed at $14.07 yesterday and opened today's trading at $7.33.