Steward secures financing to keep hospitals open during bankruptcy

Steward Health Care said Tuesday it has secured $225 million in additional funding to continue operating through Chapter 11 bankruptcy.

The company said it would seek approval for the financing deal in U.S. Bankruptcy Court in Houston later this week.

Dallas-based Steward operates more than 30 hospitals in eight states, including Massachusetts. It filed for bankruptcy protection last month and is seeking to sell all its hospitals and its network of physicians.

Steward entered bankruptcy with $75 million in debtor-in-possession financing from Medical Properties Trust, the real estate firm that acts as its landlord. Steward officials continued to seek additional financing, warning that without a deal, they would run out of cash by June 14.

John Castellano of the financial advisory firm AlixPartners, who is serving as Steward’s chief restructuring officer, said in a statement Tuesday that Steward ran a competitive process to attract lenders.

The new financing comes from a group of lenders who previously provided money to Steward.

“Securing this additional financing from a group of our secured lenders provides Steward with comprehensive financing to stabilize our operations during this bankruptcy case to the benefit of all our stakeholders, including our physicians, employees, patients and vendors,” Castellano said.

Steward’s hospitals and physician network are scheduled to be sold at a pair of auctions, with the first bids due in less than two weeks.

The first auction, on June 27, will include seven Massachusetts hospitals: Holy Family Hospital in Methuen and Haverhill, Nashoba Valley Medical Center in Ayer, St. Elizabeth’s Medical Center in Brighton, Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Morton Hospital in Taunton and Saint Anne’s Hospital in Fall River.

Norwood Hospital, which is under construction and has been closed since 2020, was not listed as part of the auction.