Rhoen-Klinikum strikes deal on loss-making hospital

FRANKFURT Tue Jan 29, 2013 9:38am EST

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FRANKFURT Jan 29 (Reuters) - Germany's Rhoen-Klinikum has struck a deal with the state of Hesse over a hospital which caused two profit warnings last year, with the state agreeing to pay subsidies and the company pressing ahead with a delayed therapy centre.

Under the deal, the Giessen-Marburg hospital, Germany's only privately-owned teaching hospital, will discuss measures to boost efficiency with workers' councils and unions, but will aim not to fire any employees before 2015.

Rhoen-Klinikum Chief Executive Martin Siebert said last week consultants had drawn up a plan that would see the hospital return to profit by the end of 2014 by cutting more than 250 jobs, among other measures.

Rhoen-Klinikum has also promised to start running a high-tech particle therapy centre, owned by Siemens, by the end of the year and to invest in new psychiatric hospitals.

The state said it would provide up to 16 million euros ($22 million) of subsidies each year for the hospital.

The company will, however, have to pay a monthly fine until it has fulfilled its investment obligations for the therapy unit, which was due to come into operation at the end of last year.

In exchange, the state of Hesse will not sue the group and will get more say in the hospital's running.

The company said last week it was seeking shareholder approval for collaboration agreements after investors blocked a merger with a larger hospitals firm.

($1 = 0.7429 euros) (Reporting by Peter Dinkloh and Andreas Kroener; Editing by Mark Potter)

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