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MedCath Completes Divestiture of Its Interest in Tucson Heart Hospital

Posted on: Friday, 1 September 2006, 09:00 CDT

CHARLOTTE, N.C., Sept. 1 /PRNewswire-FirstCall/ -- MedCath Corporation announced today the completion of the divestiture of its interest in Tucson Heart Hospital to Carondelet Heath Network. MedCath had previously announced the signing of a definitive agreement with Carondelet Health Network on Aug. 15, 2006.

Pursuant to terms of the transaction, Carondelet Health Network acquired MedCath's 59% ownership interest in Tucson Heart Hospital and the hospital repaid all secured debt owed to MedCath. Total proceeds received by MedCath equaled $40.7 million. MedCath anticipates using the proceeds from the transaction for general corporate purposes, including investment in other hospital projects.

"The divestiture of Tucson Heart Hospital provides us with capital and operating capacity to expand our delivery of high quality healthcare to both existing and new markets," said Ed French, MedCath's president and chief executive officer. "We enjoy an active pipeline of development opportunities and look forward to sharing successes in the near future."

MedCath Corporation, headquartered in Charlotte, N.C., is a healthcare provider focused primarily on the diagnosis and treatment of cardiovascular disease. MedCath focuses on serving the unique needs of patients suffering from cardiovascular disease. MedCath owns interests in and operates eleven hospitals with a total of 667 licensed beds, located in Arizona, Arkansas, California, Louisiana, New Mexico, Ohio, South Dakota, and Texas. In addition, MedCath manages the cardiovascular program at various hospitals operated by other parties. Further, MedCath provides cardiovascular care services in diagnostic and therapeutic facilities located in various states.

Parts of this announcement contain forward-looking statements that involve risks and uncertainties. Although management believes that these forward- looking statements are based on reasonable assumptions, these assumptions are inherently subject to significant economic, regulatory and competitive uncertainties and contingencies that are difficult or impossible to predict accurately and are beyond our control. Actual results could differ materially from those projected in these forward-looking statements. We do not assume any obligation to update these statements in a news release or otherwise should material facts or circumstances change in ways that would affect their accuracy.

These various risks and uncertainties are described in detail in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors and Forward Looking Statements" in MedCath's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006. A copy of this report, including exhibits, is available on the Internet site of the Securities and Exchange Commission at http://www.sec.gov/ .

MedCath Corporation

CONTACT: Edwin O. French, President & Chief Executive Officer, or JamesE. Harris, Chief Financial Officer, of MedCath Corporation, +1-704-708-6600

Web site: http://www.medcath.com/

Source: PRNewswire-FirstCall

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