Wetzikon Hospital Chooses Thurgau Public Group’s Rescue Offer Over Private Bid

Wetzikon Hospital has chosen a rescue plan from the public Thurmed hospital group over an offer from an American investment company working with a private Swiss hospital operator. The decision comes after more than two years of financial crisis triggered by an expensive hospital construction project that remains unfinished.

The hospital and its owner municipalities announced on Wednesday evening that Thurmed’s proposal offered the best route to a “financially viable restructuring.” It would also leave creditors with the highest potential recovery, a decisive consideration because they must approve the deal.

Under the existing restructuring plan, creditors would have had to write off about two-thirds of their claims, or as much as 180 million Swiss francs. Many strongly opposed that option and preferred to let the hospital go bankrupt. Wetzikon says Thurmed’s involvement could allow creditors to recover up to 47.5% of what they are owed. Further repayments could follow depending on the hospital’s performance. A bankruptcy would return only about one-fifth of their capital, according to the hospital’s calculations.

Thurmed plans to invest 35 million francs and provide another 35 million loan to complete the new building, which currently stands only as a shell. In return, it would take a majority stake in Wetzikon, while the shareholder municipalities would retain 49%. The 11 municipalities support the offer and would retain a role in strategic decisions through a shareholder agreement, including if the sale of land becomes an issue.

The municipalities would also contribute 50 million francs to the restructuring. None of the public money will flow unless creditors approve the composition agreement in October. The hospital’s future therefore still depends on whether those creditors accept the proposed settlement.