Private hospital prepares for $600M loan

GRMC: Guam Regional Medical City in Dededo is shown on Nov. 29, 2020. The island's only private hospital is pursuing a $600 million bond, and a public hearing on the matter has been scheduled for next Tuesday. Post file photo

The Guam Economic Development Authority has scheduled a public hearing next week to receive testimony on a proposed bond for the Guam Regional Medical City.

According to a notice published in The Guam Daily Post, the $600 million bond, or series of bonds, is meant “to finance the costs of the acquisition of all or a portion of the facilities and capital improvements" to the private hospital.

Melanie Mendiola, GEDA administrator, confirmed when reached for comment that the local government’s involvement is merely a part of required procedures for GRMC to pursue a triple-tax-exempt debt, and that GovGuam is not assuming any liability or responsibility for any bonds.

“It would be our responsibility to hold the hearing on their behalf, so that the public has a forum to express any concerns they may have with GRMC going out for this debt,” she said.

The public hearing is at 9 a.m. on Tuesday, Nov. 30, at GEDA  in Suite 511 of the ITC Building in Tamuning.

The owner of the hospital is listed in the public hearing notice as Guam Healthcare Development Inc., which does business as GRMC – however bond proceeds are “expected to be loaned to Blue Continent Health Care Guam Medical City, LLC.”

The Post has requested documents from the Department of Revenue and Taxation to verify whether the two companies are connected or not.

GRMC officials could not immediately comment on the bond sale as of press time, including whether the bond amounted to a sale of the hospital, saying they were waiting for guidance from its offices based in the Philippines before responding to media inquiries.

Past power struggles

This is not the first time the parent company of Guam’s private hospital took an interest in its finances.

Around 2018 and 2019, GRMC was caught up in a boardroom power struggle over ownership of PSI Healthcare Development Services, a Philippine corporation that owns The Medical City in Metro Manila and its health care network, which includes GRMC.

Post files show that a March 20, 2019 release issued by The Medical City stated that shareholders started to question Dr. Alfredo Bengzon's management of the company, after learning that $411 million had been spent on opening and maintaining GRMC "far in excess of the original $220 million planned for the Guam hospital," according to the release.

Bengzon's daughter-in-law, Margaret Bengzon, was ousted as GRMC chief executive officer in November 2018.

The hospital was restructured following the change in executive leadership, including laying off 40 workers in June 2019 in order to cut costs.

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