- 23 - Financing The Acquisition On September 17, 1987, HealthTrust adopted the ESOP and made an initial contribution to it of $30,000. On that same date, the ESOP used the initial contribution together with $809,970,000 it borrowed from HealthTrust to purchase 27 million shares of Common Stock at a purchase price of $30 per share. Of the total shares of Common Stock the ESOP acquired from HealthTrust, 26,999,000 shares were placed in an escrow account to serve as collateral for the loans to the ESOP. The Common Stock would be released from the escrow account to the ESOP as the loans were repaid. On September 17, 1987, HCAII also sold to the ESOP for $30 per share the 1,000 shares of Common Stock that it then owned. HealthTrust obtained the amount it loaned to the ESOP by borrowing $540 million (ESOP Term Loans) and from the proceeds from HealthTrust's issuance of promissory notes (ESOP Senior Notes) in the aggregate principal amount of $270 million. Interest was payable on the ESOP Term Loans at a fluctuating rate which initially was 8.713 percent. The ESOP Senior Notes bore an interest rate of 11-3/4 percent. In furtherance of the reorganization, HealthTrust also incurred approximately $392 million of debt under a credit agreement (Credit Agreement) with several banks. It further assumed the obligations of HCAII under Increasing Rate Senior Subordinated Notes (Senior Subordinated Notes) having anPage: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
Last modified: May 25, 2011