Exhibit 99.1

               SunLink Health Systems Announces Completion of the
                    Sale of the Mountainside Medical Center

    ATLANTA--(BUSINESS WIRE)--June 2, 2004--SunLink Health Systems,
Inc. (Amex: SSY) today announced the completion of the sale of its
Mountainside Medical Center hospital in Jasper, GA, to Piedmont
Medical Center, Inc.
    Robert M. Thornton, Jr., chairman and chief executive officer of
SunLink commented, "This sale furthers several of our key corporate
and operational objectives and, we believe, reflects the value
inherent in our hospital portfolio. This transaction will allow us to
focus more sharply on our core operating strategy of being a quality
healthcare provider to exurban and rural communities. We are confident
this sale will greatly benefit SunLink and our shareholders."
    The sale of the assets of Mountainside for approximately $40
million less estimated sale expenses of $1.5 million results in a gain
from discontinued operations of approximately $13.7 million after
income tax expense of approximately $5.9 million. SunLink also said it
will record charges of approximately $3.0 million to write down
certain assets retained in the sale and charges relating to the early
retirement of debt. SunLink said net proceeds from the sale of
approximately $35 million were used to pay off debt.
    Excluding Mountainside Medical Center sold to Piedmont, SunLink
Health Systems, Inc. currently operates seven community hospitals and
related businesses in the Southeast and Midwest. Each SunLink facility
is the only hospital in its community. SunLink's operating strategy is
to link patients' needs with dedicated physicians and health
professionals to deliver quality, efficient medical care in each
community it serves. For additional information on SunLink Health
Systems, Inc, please visit the Company's website at
www.sunlinkhealth.com.
    This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995 including, without limitation, statements regarding the Company's
business strategy. These forward-looking statements are subject to
certain risks, uncertainties and other factors, which could cause
actual results, performance and achievements to differ materially from
those anticipated. Certain of those risks, uncertainties and other
factors are disclosed in more detail in the Annual Report on Form 10-K
for the year ended June 30, 2003 and other filings with the Securities
and Exchange Commission which can be located at www.sec.gov.


    CONTACT: SunLink Health Systems, Inc., Atlanta
             Robert M. Thornton, Jr., 770-933-7000