August 21, 2017 / 6:32 PM / a year ago

Investor asks Community Health to replace CEO

(Reuters) - Community Health Systems Inc (CYH.N) shares rose more than 11 percent on Monday after an investor released a letter it had sent to the hospital company’s board pushing for the replacement of its chief executive.

ASL Strategic Value Fund said in the letter dated Aug. 8 that Community Health CEO Wayne Smith should be removed because of poor performance and that the board should claw back part of some senior executives’ compensation.

It was unclear how many shares ASL, which described itself in the letter as a “long-term investor,” owns in the company.

Little is known about ASL. It does not appear among Community Health’s largest investors, according to Thomson Reuters data.

ASL declined to comment beyond the contents of its letter. The fund also declined to disclose the size of its stake.

A Community Health spokesperson could not be immediately reached for comment.

Community Health shares were up about 11 percent to $7.80 in afternoon trading.

Shares of Community Health have lost more than 85 percent of their value since June 2015 as the company has contended with a heavy debt load and mounting losses after its acquisition of rival hospital operator Health Management Associates (HMA).

ASL said in the letter that it has tried to contact the management to voice its concerns about the company’s recent performance, but did not get a response.

The fund said the management had failed to meet its own operating outlook for revenue growth and earnings before interest, tax, depreciation and amortization, among others, over the course of the year.

ASL also criticized Community Health for failing to make changes to its board that it agreed to in a settlement last year.

Earlier this month, Community Health posted a surprise quarterly loss and narrowed its full-year revenue forecast range due to weak patient volumes.

Reporting by Divya Grover in Bengaluru and Michael Erman in New York; Editing by Arun Koyyur and Meredith Mazzilli

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