American Health of Newport to Buy Its Medical Equipment

American Health Services Corp., a Newport Beach firm that develops and operates 40 diagnostic treatment centers in the country, announced Thursday an agreement to buy the equipment it has been leasing from GE Medical Systems.

Thomas V. Croal, chief financial officer and vice president of American Health, declined to disclose the deal’s financial terms, but he did call it “one of the biggest transactions we have ever entered into.”

For the past seven years, American Health has leased most of its equipment from Milwaukee-based GE Medical, Croal said. American Health specializes in developing imaging clinics for radiology treatments and X-rays.

American Health will restructure its existing leases into one loan from GE Medical, Croal said.

“We will have an increase in cash flow,” he said, “because the interest we will pay on the loan is less than what we pay for the lease.”

The financing commitment is subject to approval by American Health’s major creditor, New York-based Philips Credit Corp.

Under terms of the agreement, American Health will issue to GE warrants representing 12.5% of its common stock.