A judge will be asked on Dec. 13 to approve Vancouver Coastal Health’s purchase of Seymour Health Centre Inc. from receivership for $12 million.
Lawyers for receiver Ernst and Young have scheduled a hearing for Dec. 13 in B.C. Supreme Court about what they say is the only viable bid for the company that operates a primary care clinic on West 7th Avenue and an integrated health services clinic on Hornby Street.
Seymour Health already gave control of urgent and primary care centres in Downtown Vancouver and North Vancouver to VCH after a judge appointed the receiver in June.
Seymour owed VCH at least $6.8 million when it defaulted on a loan.
In September, the court approved a sale investment and solicitation process after VCH made a stalking horse bid for around $11.5 million. That set the floor price for the assets of the company so that Ernst and Young could seek other, bigger offers and close a deal by March 1.
BDC consulted on the list of 77 potential bidders invited, 11 of which were given confidential access to the company’s books.
Ernst and Young’s Dec. 1 application to the court said three non-binding letters of intent came in, each contemplating acquisition of only the Hornby Street lab, only the Hornby primary care centre and West 7th clinic, and acquisition of all business segments, except the Burnaby sleep lab license.
The receiver rejected all three.
“None of the bids were superior to the consideration of the stalking horse bid, and none of the bids had more favourable terms or conditions than the stalking horse bid,” the court filing said.
The receiver declared VCH the successful bidder, subject to confirmation by the court. The sale allows “retention of virtually all of the Seymour staff at VCH’s election” and includes the Seymour clinics, diagnostic imaging and the license for the Burnaby sleep lab.
“There is urgency to conclude a transaction as delays in closing the transaction contemplated by the sale agreement, or otherwise, will increase the cash loss associated with these proceedings and will lead to continued uncertainty of the clinics’ operations which may negatively impact patient care,” the receiver’s filing said.
The VCH credit bid, according to Ernst and Young’s second report filed Wednesday, is worth $10.1 million. That will increase to $12.1 million by the closing date based on another $2 million of borrowing by the receiver.
The second receiver’s report said that Seymour Health ended the Sept. 4 to Nov. 24 period with $479,042 cash on hand. It forecast cash on hand of almost $97,000 by March 31, based on $2.58 million in receipts, $5 million in disbursements and $2 million in receiver’s borrowing.
According to Ernst and Young, Seymour Health’s problems began around July 2019 due to an inability to generate positive cash flows to meet obligations. In May 2022, it closed a $10 million equity investment from BDC based on a $30 million enterprise valuation. That resulted in BDC owning one-third of shares in the parent company of Seymour Health.
A numbered company owned equally by Sabi Bining and Sandeep Kaur Parmar holds the remaining two-thirds.
Despite the transaction, Seymour Health continued to have difficulty paying doctors, staff and medical suppliers. In June 2022, VCH agreed to keep Seymour Health afloat to carry on its operations, but Seymour defaulted almost a year later.
Support theBreaker.news for as low as $2 a month on Patreon. Find out how. Click here.