Vanguard Health System has agreed to place $500 million of privately held stock in escrow to make sure it invests the capital in renovations to Detroit Medical Center's hospitals, according to a report in The Detroit News.
The announcement was included in a nonbinding letter of intent obtained by the newspaper.
Vanguard is attempting to purchase DMC and has promised to invest the $500 million over five years on around 20 projects, including a new patient tower at the Children's Hospital of Michigan, as well as an additional $350 million for ongoing repairs and technology upgrades, according to the report.
The letter of intent would also stipulate that if Vanguard fails to meet its commitment to DMC, DMC would become a shareholder, according to the report.
Read the Detroit News report on Vanguard's $500 million guarantee.