Private hospital confirms it is being sold, nonprofit buyer seeking $600M loan with GovGuam support

DEDEDO-A subsidiary of the Philippines-based owner of Guam Regional Medical City confirmed Tuesday it has entered into an agreement to sell its physical assets and operations to a nonprofit that will rename the hospital Blue Continent Healthcare Guam Medical City.
Guam Regional Medical City in Dededo is shown on November 24,2021. GRMC's current owners announced Tuesday that an agreement has been reached to sell the assets and operations of the private hospital. (Photo by David Castro/The Guam Daily Post).

GRMC's owner, Guam Healthcare Development Inc, announced its agreement to sell the private hospital the same day the Guam Economic Development Authority held a public hearing on the proposed $600 million loan for the acquisition of the hospital.

GovGuam will not be on the hook for the loan, according to GEDA, but Gov. Lou Leon Guerrero is being asked to certify that the hospital serves a public need so that the bond lenders will get federal tax exemption from the proceeds of their investment into the Guam hospital.

The buyer will hire the hospital's current owner to provide the staff for the hospital, according to a press release from GRMC.

"This will comprise of the same outstanding cadre of dedicated and committed staff who currently attend to the Guam community’s acute care needs," according to GRMC's current owner.

Blue Continent Healthcare Guam Medical City will also be referred to as BCG.

"BCG plans to continue with the hospital’s ongoing strategic expansion, including increasing its inpatient bed capacity from 136 to 186 beds and contributing its healthcare infrastructure to better serve the key strategic island nations in the Blue Continent, including the Territory of Guam, Commonwealth of the Northern Mariana Islands, Federated States of Micronesia, Republic of the Marshall Islands, and Republic of Palau," the press release stated.

Dr. Gilbert Mudge, BCG's chairman, is quoted in the press release, “The new foundation’s ownership of the hospital will ensure better access to funding resources and will cement BCG’s position as the main provider for advanced clinical care, including cardiovascular, neuroscience, diabetes, cancer, dialysis, rehabilitation, and skilled nursing services in the Blue Continent.”

“By having Guam serve as the hub and center of healthcare services in the region and by developing healthcare infrastructure for the island nations within the Blue Continent, we will move forward as a stronger, mission-driven organization,” says GRMC’s President & CEO, Dr. Michael W. Cruz.

Blue Continent Healthcare Guam Medical City was established as a limited liability company in July in Delaware.

It's unclear what will happen to the remaining commitments GRMC made to GovGuam as a result of receiving tax breaks in 2015 under Gov. Eddie Calvo's administration.

Based on GRMC's past estimates, it would generate $420 million in new tax revenues for GovGuam, more than double the $170 million dollar tax abatement that has been granted to the hospital over 20 years.

The tax breaks under the Qualifying Certificate program also require GRMC to make $25 million in public contributions staggered over the 20-year term of the QC.

In addition, the QC also requires GRMC to treat MIP patients, according to GRMC in 2015.

Under the terms of the QC, 75% of all GRMC employees must be U.S citizens or U.S residents.(The Guam Daily Post).

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