Summit Health Delays Debt Securities Sale

Summit Health Ltd., citing weak market conditions, has postponed a unique sale of debt securities that would have effectively offered its 52% equity stake in Summit Care Corp. to the public.

Summit Health, a Burbank-based operator of hospitals, said the offer might be rescheduled “at a date to be determined based on market conditions.” Health-care stocks in general have been pummeled lately amid concern that President Clinton’s health-care reform efforts will slow the companies’ earnings growth.

Summit Health had planned to sell $50 million of 10-year notes that, under certain terms, could be swapped for common shares of Summit Care that are now held by Summit Health.

Summit Care, a nursing-home operator also based in Burbank, had sold 48% of its stock to the public last March and currently has about 5 million shares outstanding, of which about 2.6 million are held by Summit Health.

Companies routinely sell debt securities that are convertible into their own common shares, but Summit Health was rare in offering notes exchangeable into the stock of a separate enterprise.