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#ausbiz

3 posts3 participants0 posts today

So there's a lot of commentary around the collapse of private hospital operator Healthscope. To me, one detail jumped out: https://www.abc.net.au/news/2025-05-27/healthscope-collapse-an-early-warning-sign-for-private-hospitals/105339244

"Owned by the Canadian-American investment firm Brookfield, the indebted operator fell into receivership on Monday after its syndicate of banks and hedge funds withdrew support."

So wait, who exactly is Brookfield?

This from Wikipedia:

"Brookfield Corporation is a Canadian multinational company that is one of the world’s largest alternative investment management companies. It has over US$900 billion of assets under management, much of which is workers’ deferred income from global public pension funds. It focuses on direct control investments in real estate, renewable power, infrastructure, credit and private equity. The company invests in distressed securities through Oaktree Capital, which it bought in 2019."

https://en.wikipedia.org/wiki/Brookfield_Corporation

In other words, it's a private equity firm.

The pattern for private equity is to buy out companies, funded by loading them to the brim with debt, then pay for that debt by stripping out assets and massively cutting costs.

So let's take a look at the original media release for when Brookfield took over Healthscope:

"Brookfield Business Partners L.P. (NYSE:BBU) (TSX:BBU.UN) ("Brookfield Business Partners") together with institutional partners (collectively “Brookfield”), is pleased to announce that it has reached an agreement to acquire up to 100% of Healthscope Limited (ASX: HSO) (“Healthscope” or the “Company”) for approximately $4.1 billion (AUD$5.7 billion). Healthscope is the second largest private hospital operator in Australia and the largest pathology services provider in New Zealand.
...
"The transaction will be funded with up to $1.0 billion of equity, $1.4 billion of long-term financing and $1.7 billion from the sale and long-term leaseback of 22 wholly-owned freehold hospital properties."

Let's run over that again.

This private equity firm took over a $4.1 billion private hospital firm.

It only paid $1 billion in equity.

A further $1.4 billion was debt. That's $1.4 billion for a company that's only worth $4.1 billion.

And then $1.7 billion from selling off and then leasing back its hospitals. That's the asset strip out.

So the company ended up with $1.7 billion less in assets, $1.4 billion more in debt, and the added costs of leasing those hospitals. And it was only worth $4.1 billion to begin with.

Starting to see why it went under?

The asset stripout continued in 2020:

"Healthscope has entered into a binding agreement to sell its New Zealand pathology business, Asia Pacific Healthcare Group (APHG) to the NZ Super Fund and Ontario Teachers’ Pension Plan Board (Ontario Teachers’) who will each take a 50 percent stake.

"The sale is valued at more than NZD550 million and is subject to customary approvals including approval from New Zealand’s Overseas Investment Office, with completion expected in the next six months."

https://www.nzsuperfund.nz/news-and-media/healthscope-sells-new-zealand-pathology-business-aphg-to-nz-super-fund-and-ontario-teachers-pension-plan/

But that's not the end of it.

Because Helathscope went through the private equity wringer not just once, but twice.

This from 2010:

"Private equity firms TPG and Carlyle won a bidding war for Australian hospital owner Healthscope Ltd , agreeing to pay $1.73 billion in the country's largest buyout deal since 2007."

https://www.reuters.com/article/business/tpg-carlyle-to-buy-australias-healthscope-for-17-billion-idUSTRE66H2KB/

The company was then floated back on the stock market in 2014:

"Healthscope chief executive Robert Cooke has persuaded local and foreign investors to back the company's $3.6 billion float, with shares in Australia's biggest initial public offering in four years set to start trading on Monday.
...
"Mr Cooke said his greatest contribution to the turnaround of the private hospital, medical centre and pathology operator had been an ability to balance an improvement in patient care with a financial benefit.

"That pitch, along with a $436 million capital expenditure program to expand the company's 44 private hospitals, and an ageing population that is spending more than ever on medical care, persuaded investors to support the $2.25 billion raise.

"The company is being offloaded by private equity giants TPG and The Carlyle Group, which took it private in 2010 in a $2.7 billion buyout. It will begin trading at a hefty 21.9-times forecast net profit. TPG and Carlyle will retain 38 per cent of the shares on offer."

https://www.smh.com.au/business/investors-inject-billions-into-healthscope-float-20140725-3ckw8.html

#auspol #ausbiz #business #capitalism

ABC News · Healthscope collapse raises questions about the viability of private hospitalsBy Audrey Courty

Cafe owner: “We were told that the 2021 flood was a one-in-50-year event …”

A typical misunderstanding of what ‘one-x-year event’ actually means. 🤦🏻 (something I learnt in high school Geography - but it’s an ‘elective’ subject that most Australian students don’t take)
theguardian.com/australia-news #AusPol #NSWPol #AusBiz #NSWFloods2025

Here’s is an explainer by authors from UNSW and UniAdelaide: theconversation.com/what-is-a-

The Guardian · ‘Two years to build and two days to lose’: Elisha thought her Taree cafe was safe – until it was under waterBy Luca Ittimani
Continued thread

This isn’t a coincidence, this is the outcome of a plan that has been progressed over the past 15 years. When outcomes were better than expected, they kept expanding the scope and goal.
The energy transformation is revolutionary, because it also meant that China can reserve its Coal, Gas and oil for future usage and emergencies - such as during War and conflict.

They even sent Diplomats to Australia to warn us the Coal industry of a massive shift in its importing.
But instead of heeding warnings, Australia’s so-called ‘Business minded’ ‘Conservatives’ (and Progressives) went into denial and affirmed their commitment towards Coal, Gas and Oil. 🤷🏻

Australians,
… we are being led by political leaders that are only interested in the next 4-years.
When are we going to replace them with leaders that think about the next 100-years?
#AusPol #AusBiz

An example of good ‘Political Journalism’. We need more reporting looking at international comparisons, and less navel-gazing in Australian Journalism

“Netherlands a ‘cautionary tale’ for Coalition’s mortgage deduction scheme, expert warns “

Writes Jonathan Barrett for The Guardian theguardian.com/australia-news
#AusPol #AusBiz #AusVotes2025 #HousingCrisis #Journalism

The Guardian · Netherlands a ‘cautionary tale’ for Coalition’s mortgage deduction scheme, expert warnsBy Jonathan Barrett

When ‘Australia’ was upset with the Japanese during League of Nations the then-PM ‘Billy’ Hughes made a purposeful effort to lobby US senators to get them onside despite the President’s position on the matter (‘Racial Equality’).

Meanwhile - fast forward to present day: Australia’s Leaders, Dutton and Albanese are content with just focusing on their election campaigns.
sbs.com.au/news/article/tariff
#AusPol #AusVotes2025 #TradeWar #AusBiz #FreeTrade #Tariffs #InternationalRelations

SBS NewsTariffs on 'incredibly important' ally Australia branded 'insulting' in fiery US Senate hearingA Senate Finance Committee hearing in the United States has seen one of Trump's trade chiefs come under fire over tariffs, with the representative admitting to "running up the score" on Australia.

What mature politics sounds like,

Listen/Watch Singapore discuss the Trump Trade war instagram.com/reel/DILLLdgoPHv
#AusPol #AusVotes2025 #AusBiz

InstagramCNA on Instagram: "What the US is doing now with tariffs "is not reform” but “it is rejecting the very system it created", said Singapore Prime Minister Lawrence Wong in parliament on Tuesday (Apr 8), where he spoke at length on the new tariffs and its implications for Singapore. “According to the administration, the sweeping tariffs are needed to fix America’s trade imbalance. But there is nothing inherently wrong about running a trade deficit,” he said. “If the tariffs were truly reciprocal, and if they were meant to target only those with trade surpluses, then the tariff for Singapore should be zero,” he added, pointing out that Singapore has a free trade agreement with the US and imposes no tariffs on US imports. Mr Wong also said the tariffs will "accelerate the fracturing of the global economy". #sgnews #singapore"82K likes, 1,863 comments - channelnewsasia on April 7, 2025: "What the US is doing now with tariffs "is not reform” but “it is rejecting the very system it created", said Singapore Prime Minister Lawrence Wong in parliament on Tuesday (Apr 8), where he spoke at length on the new tariffs and its implications for Singapore. “According to the administration, the sweeping tariffs are needed to fix America’s trade imbalance. But there is nothing inherently wrong about running a trade deficit,” he said. “If the tariffs were truly reciprocal, and if they were meant to target only those with trade surpluses, then the tariff for Singapore should be zero,” he added, pointing out that Singapore has a free trade agreement with the US and imposes no tariffs on US imports. Mr Wong also said the tariffs will "accelerate the fracturing of the global economy". #sgnews #singapore".

Relying on natural attrition is also irresponsible.

The public service is under resourced, and needs staff to be replaced. Liberal-Nationals lack any sense of creativity and leadership to create value. Overly relying on ‘cost cutting’ is only going to exacerbate the stagnation.
theguardian.com/australia-news
#AusPol #AusVotes2025 #Ausbiz

The Guardian · ‘We’ve made a mistake’: Peter Dutton backs down on working from home policyBy Josh Butler
InstagramFork Ranger | Frank Holleman on Instagram: "Food miles are completely useless when it comes to making sustainable food choices... When we think of the climate impact of food we often think of transport because it’s so easy to visualize how bananas travel half the globe to arrive in Europe. But transport plays a minor role in the impact of food. It’s more useful to think of how much space was necessary to grow that food. 🍌 Banana: one tree → low impact 🥩 Beef: fields of grass (and maybe even corn) to feed a cow → high impact So if your plant-based recipe includes products from across the world, that’s okay. There are still benefits for promoting a 𝗹𝗼𝗰𝗮𝗹 𝗳𝗼𝗼𝗱 𝙨𝙮𝙨𝙩𝙚𝙢 (vs optimizing for local food choices): - more transparency - more connection to our food and landscape - more local crops and higher biodiversity But once you enter the supermarket, you’re already part of the global food system. In that context, paying attention to food miles is useless. I think this is good news because it simplifies sustainable food choices: make animal foods a luxury and don’t worry so much about all the other stuff. What do you think? And what does it make you feel? - - Sources: Crippa, M., Solazzo, E., Guizzardi, D., Monforti-Ferrario, F., Tubiello, F. N., & Leip, A. J. N. F. (2021). Food systems are responsible for a third of global anthropogenic GHG emissions. Nature Food, 2(3), 198-209. Hannah Ritchie (2020) - “Very little of global food is transported by air; this greatly reduces the climate benefits of eating local” Published online at OurWorldInData #climatemergency #climatecrisis #sustainablefuture #sustainabilitymatters #actonclimate"50K likes, 835 comments - forkranger on March 20, 2025: "Food miles are completely useless when it comes to making sustainable food choices... When we think of the climate impact of food we often think of transport because it’s so easy to visualize how bananas travel half the globe to arrive in Europe. But transport plays a minor role in the impact of food. It’s more useful to think of how much space was necessary to grow that food. 🍌 Banana: one tree → low impact 🥩 Beef: fields of grass (and maybe even corn) to feed a cow → high impact So if your plant-based recipe includes products from across the world, that’s okay. There are still benefits for promoting a 𝗹𝗼𝗰𝗮𝗹 𝗳𝗼𝗼𝗱 𝙨𝙮𝙨𝙩𝙚𝙢 (vs optimizing for local food choices): - more transparency - more connection to our food and landscape - more local crops and higher biodiversity But once you enter the supermarket, you’re already part of the global food system. In that context, paying attention to food miles is useless. I think this is good news because it simplifies sustainable food choices: make animal foods a luxury and don’t worry so much about all the other stuff. What do you think? And what does it make you feel? - - Sources: Crippa, M., Solazzo, E., Guizzardi, D., Monforti-Ferrario, F., Tubiello, F. N., & Leip, A. J. N. F. (2021). Food systems are responsible for a third of global anthropogenic GHG emissions. Nature Food, 2(3), 198-209. Hannah Ritchie (2020) - “Very little of global food is transported by air; this greatly reduces the climate benefits of eating local” Published online at OurWorldInData #climatemergency #climatecrisis #sustainablefuture #sustainabilitymatters #actonclimate".