The creditors' meeting of GZO Spital Wetzikon, which is in debt moratorium, will take place in Uster on Wednesday. The proposed composition agreement put forward by the hospital management will be at the center of the meeting. Given the polarization — on one side the agreement supported by the two administrators Brigitte Umbach-Spahn and Stephan Kesselbach, on the other side groups of creditors who consider the dividend promised to them far too meager — the meeting is likely to be highly emotional.

However, voting on the composition agreement will be in writing, and the deadline runs until Saturday, November 7. Anyone who does not vote and therefore does not submit the ballot with the preprinted "Yes" will automatically reject the composition agreement, which is likely to lead to GZO's bankruptcy. The debt moratorium ends a little more than a month later, on December 19, and cannot then be extended again.

Bondholders Dominate the Creditors

There are two ways to approve the composition agreement: either more than 50 percent of the headcount votes with at least two-thirds of the total claim amount, or 25 percent of the headcount votes with at least three-quarters of the total claim amount.

Only creditors with unsecured and non-preferential claims are entitled to vote. According to the administrators' schedule, the recognized claims filed in the third class total 213.6 million Swiss francs. Of this, 146.3 million Swiss francs are attributable to bondholders (the nominal amount of the distressed GZO bond is 170 million Swiss francs) and 60.3 million Swiss francs to other financial creditors.

This is How GZO Management Sees Things

In the run-up to the creditors' meeting, finews held a conversation with GZO management at the Wetzikon hospital. Present were Andreas Mika, chairman of GZO's board of directors, hospital director Hansjörg Herren and CFO Daniel Müller. They used the opportunity to present their view of things. In addition to the already known arguments in favor of GZO's restructuring solution, the discussion also focused on points repeatedly raised by critical creditors.

It has been alleged on several occasions that GZO wants to restructure at creditors' expense through the composition moratorium proceedings. Mika vehemently rejects this: "We have always said that we will do everything possible until the very end to put the creditors in a better position within the scope of what is possible. This procedure is a huge burden for management and staff. It is anything but an easy way to reduce debt. I can't recommend it to anyone."

"I can't recommend the composition moratorium proceedings to anyone."

Müller adds: "At the beginning of 2025, we were in contact with numerous potential investors. There was certainly interest in a solution for GZO. However, the ongoing composition moratorium made negotiations more difficult because potential investors were reluctant to make binding commitments given the legal and financial uncertainties."

Mika points out that hospital management essentially wears two hats during the composition moratorium. "On the one hand, we have to safeguard creditors' interests as best we can, which means aiming for the highest possible payout. At the same time, on the other hand, we have to try to set the course for a sustainable restructuring of the company. That creates a tension."

"There is a tension between creditors' interests and the sustainable restructuring of the company."

The composition agreement now on the table would give creditors a significantly better payout than bankruptcy. According to GZO, it is also likely to take years before the properties can actually be realized in a liquidation. Under the composition agreement, the dividend amounts to up to 47.5 percent; however, 10.3 percent of that is deferred over eleven years and up to 8.2 percent is tied to the clarification of legal disputes in connection with claims by Steiner AG or its legal successor. An additional payout, the amount of which is still largely open, will become due if certain conditions are met.

By contrast, the administrators expect a dividend of only 23.1 to 29.3 percent in the event of bankruptcy, assuming the provisions related to Steiner are fully reversed.

The hospital management strongly rejects the accusation that it favors Thurmed's offer of a stake in the shareholding structure of GZO AG after the composition moratorium over the Infracore offer (a proposal for a sale-and-leaseback transaction) because that would also be the easiest route for it, for example with a view to its own job security.

"If Thurmed takes over, Wetzikon will probably no longer need an independent hospital management in the medium term."

Müller says: "If Thurmed takes over, Wetzikon will probably no longer need an independent hospital management in the medium term. For staff, especially outside the core business, there will also be organizational and personnel changes. The top management is likely to be affected first. The Board of Directors would probably also be reconstituted." From this perspective, it would even have been easier for management to make a different decision, the CFO makes clear.

Herren says that Infracore lacked commitment and interest in a solution — "we felt too little of that; there were no binding commitments with concrete, viable and secured conditions." And Müller emphasizes that Infracore had "calculated very tightly".

Although GZO management had been in discussions with Thurmed for several months as part of an investor process, Müller still considers it entirely conceivable that the Thurgau hospital group became active because of Kawa's initial offer (which, in addition to acquiring the properties, also envisaged transferring hospital operations to Swiss Medical Network SMN, which like Infracore is close to Aevis Victoria). Herren adds: "We were already having intensive discussions with Kawa and SMN when, somewhat surprisingly for us, the existing Thurmed interest became much more concrete."

"Infracore lacked binding commitments with concrete, viable and secured conditions."

Herren dismisses as baseless the accusation that the hospital management is keeping relevant data under wraps, especially data relevant to the valuation of the hospital properties. "We disclosed all files relevant to the decision-making process to the creditors, including the PwC report."

He also comments on another hot topic. "The Zurich Health Departement has repeatedly confirmed that the specific service mandates are always tied on a location-specific basis to a particular sponsoring entity or operating company, namely GZO AG. A transfer of the service mandates to a rescue company cannot take place without a prior, time-consuming needs assessment." Some creditors had demanded that GZO set up a rescue company in view of the possible rejection of the composition agreement and the possibility of bankruptcy in order to secure the continuation of hospital operations.

As for the canton: in February, hospital management asked the Government Council to grant a guarantee of 50 million Swiss francs to secure completion of the new building. As expected, the canton rejected the request. As early as 2024, it had not wanted to save GZO, which left the hospital with no other option than debt moratorium. So was the February request hopeless from the outset and mere stubbornness?

"We submitted the request for a cantonal guarantee in the interests of the creditors so that we could truly exhaust all options."

The hospital management was well aware that the chances were slim. "We submitted the request in the interests of the creditors so that we could truly exhaust all options," Mika replies. "And we absolutely wanted an official decision from the government council," Herren adds.

In September, hospital management received a letter from eight prominent Swiss creditors. In it, they expressed their dissatisfaction with the composition agreement and announced that they would reject it if nothing changed. Müller stresses that a number of elements demanded by major creditors have already been incorporated into the agreement and that the dialogue continues. "The letter reached us after the Board of Directors had decided not to pursue the Infracore offer any further; there was a need for clarification in the interest of transparency," Herren notes.