Trust Hospital Struggles with Increasing Debt, Auditor-General Reports.

The Trust Hospital Company Limited is experiencing severe financial stress as its debt continues to mount, raising alarms about its financial health, according to the 2023 Auditor-General’s report.

The report highlights that The Trust Hospital’s debt has escalated to a worrying GH¢54,382,095.

This debt, accumulated from various borrowings, will need to be repaid with interest, further intensifying the hospital’s financial challenges.

Since 2010, the equity component of the hospital’s capital structure has remained unchanged at GH¢50,000. This stagnant equity, combined with the growing debt, has resulted in an astonishing debt-to-equity ratio of 1,087.64:1.

This ratio illustrates the hospital’s heavy dependence on debt financing, putting it in a precarious financial situation.
In response, the hospital’s management has suggested to its sole shareholder, the Social Security and National Insurance Trust (SSNIT), to increase the equity component of the capital structure.

This recommendation aims to alleviate the high debt levels and improve the financial balance.

However, SSNIT has not yet provided a definitive response to the proposal.

The Auditor-General recommends that The Trust Hospital work with SSNIT management to consider converting part of the debt into shares to increase the current capital and reduce the high gearing ratio.