Genesis HealthCare Proclaims Strategic Restructuring Steps to Strengthen Stability Sheet and Chart Path for Restoration NYSE:GEN



  • Transformative steps scale back debt by roughly $256 million and embrace an instantaneous $50 million capital funding
  • Alternative for an extra $25 million capital funding by April 15, 2021
  • Preliminary capital funding ends in two appointments to the Board of Administrators and voluntary delisting from the New York Inventory Alternate and deregistration underneath the Alternate Act

KENNETT SQUARE, Pa., March 03, 2021 (GLOBE NEWSWIRE) — Genesis Healthcare, Inc. (“Genesis” or the “Firm”) (NYSE:GEN) introduced at present a three-part strategic restructuring plan to strengthen the Firm’s liquidity place and capital construction because it charts a path to restoration.

First, Genesis has agreed to terminate its grasp lease overlaying 51 amenities leased from associates of Welltower Inc. (“Welltower”) and transition operations to new operators. In return, Genesis will obtain roughly $86 million, which it’s going to use to repay a portion of its debt obligations to Welltower. As well as, Genesis will obtain roughly an extra $170 million in debt discount from Welltower upon the prevalence of sure circumstances, together with the transition of the 51 amenities.

Second, Genesis entered right into a definitive settlement with ReGen Healthcare, LLC (“ReGen Healthcare”) for a capital infusion of $50 million.

Third, the Firm will voluntarily delist its Class A standard inventory (the “Widespread Inventory”) from the New York Inventory Alternate and deregister its Widespread Inventory underneath the Securities Alternate Act of 1934 (the “Alternate Act”).

“The severity of the pandemic dramatically impacted affected person admissions, revenues and prices, compounding the pressures of our long-term, lease-related debt obligations,” mentioned Chief Government Officer Robert Fish. “These restructuring transactions enhance the monetary and operational stability of the Firm considerably and construct on the encouraging indicators we’re seeing as COVID-19 case charges proceed to materially decline and residents, sufferers and workers are vaccinated.”

Transition out of 51 amenities leased from Welltower
Genesis at present leases 246 expert nursing and assisted/senior dwelling amenities from third events, together with private and non-private actual property funding trusts (“REITs”). One of many Firm’s largest landlords, Welltower, will re-tenant and/or promote the 51 amenities it leases to Genesis associates, in 9 states. Genesis will proceed to function the amenities till acceptable approvals from state regulators are accomplished. The transitions are anticipated to happen over the following a number of months.

Presently, Genesis can be indebted to Welltower in an approximate quantity of $423 million. In return for its settlement to terminate its grasp lease with Welltower, upon the transition of the operations of all 51 amenities, Genesis will obtain roughly $86 million, which it’s going to use to repay a portion of its debt obligations to Welltower. As well as, the Firm will obtain roughly $170 million in extra debt reductions from Welltower upon the satisfaction of sure circumstances, together with the transitioning of all 51 amenities. In consequence, in complete, Genesis expects to scale back its debt excellent to Welltower, by roughly $256 million and prolong maturity to January 1, 2024. Welltower can even allow sure collateral to be launched and utilized as collateral for brand new debt.

Previous to the COVID-19 pandemic, these 51 amenities generated on a mixed foundation approximate annual web income of $640 million. This transaction will consequence within the discount of $79 million in annual money lease bills. Welltower can even obtain fairness within the Firm, rising its stake in Genesis on a fully-diluted foundation from roughly 6% to as much as roughly 15%.

Funding Settlement with ReGen Healthcare
Genesis has additionally secured a $50 million debt funding from ReGen Healthcare, LLC. This debt funding converts into fairness representing a 25% possession curiosity within the Firm’s subsidiaries on a fully-diluted foundation, contingent upon each the receipt of all required regulatory approvals and the discount of indebtedness owed by the Firm to Welltower.

ReGen Healthcare additionally has the choice to make an extra debt funding of $25 million exercisable no later than March 31, 2021 and to be funded by April 15, 2021. If made, this debt funding will convert into fairness concurrently with the conversion of the preliminary debt funding into fairness, leading to a 33.3% possession curiosity within the Firm’s subsidiaries on a fully-diluted foundation. As well as, on the closing of the second funding, ReGen Healthcare can be issued a warrant, exercisable for fairness, which, along with the 2 debt investments, would symbolize an possession curiosity of roughly 43% of the Firm’s subsidiaries on a fully-diluted foundation.

ReGen Healthcare, along with its associates and its principals, has a monitor document of efficiently creating and turning round firms that enhance each healthcare supply and insurance coverage processes for well being plans, their members, and their supplier companions. Considered one of these associates, Pinta Capital Companions, has invested broadly in progressive companies for the chronically unwell and utilized new practices in companies to one of many neediest, frailest and most weak populations.

As a part of the settlement, two Genesis Board Members, John F. DePodesta and Terry Rappuhn, have relinquished their present positions and ReGen Healthcare has appointed Mr. David Harrington and Mr. John Randazzo, efficient instantly. As well as, Mr. Harrington has been appointed Chairman of the Board.

“The Firm thanks Mr. DePodesta and Ms. Rappuhn for his or her service and dedication all through their respective tenures,” mentioned Robert Fish “Genesis welcomes Mr. Harrington and Mr. Randazzo on our Board of Administrators and can profit significantly from their deep and diversified expertise in healthcare supply administration, healthcare sector monetary experience and entrepreneurial acumen.”

Mr. Harrington brings 35 years of business expertise in crucial areas of healthcare supply administration to the Board. He has held govt positions at AETNA, UnitedHealthcare, Columbia/HCA and Doctor High quality Care. As CEO of American Imaging Administration (“AIM”) from 2001 to 2008, Mr. Harrington circled this radiology administration enterprise, rising its web price from unfavorable $19 million to over $350 million. In August 2007, AIM was offered to WellPoint for $307 million. Since 2009, when Mr. Harrington established DASH Enterprise Group, he has suggested and developed many healthcare firms within the senior care house. Mr. Harrington is likely one of the founding principals of Pinta Companions and in that position is enthusiastic about rethinking the supply of well being care to the chronically unwell.

Mr. Randazzo has spent greater than 35 years within the well being care and know-how fields and brings wealthy expertise in operational excellence, company finance and entrepreneurship. He’s at present Government Chairman of Waters Edge Dermatology, one of many largest dermatology practices within the nation, and Government Chairman of Sentry Knowledge Programs, a supplier of pharmacy know-how options to hospitals. Mr. Randazzo beforehand co-founded and led one of many nation’s largest impartial pressing care firms, FastMed. He has held govt positions at Worth Oncology Science, Girls’s Well being Connecticut Inc. and CIGNA. Mr. Randazzo has served as a senior advisor to international personal fairness agency, Warburg Pincus, for over 20 years.

Delisting from the NYSE and Deregistration underneath the Alternate Act
In reference to the funding by ReGen Healthcare, Genesis has agreed and intends to voluntarily delist its Widespread Inventory from the New York Inventory Alternate. Moreover, the Firm has agreed and intends to deregister its Widespread Inventory underneath the Alternate Act and droop its public reporting obligations.

The Firm intends to file a Type 25 with the Securities and Alternate Fee (the “SEC”) on or about March 15, 2021 with a view to delist from the New York Inventory Alternate. The Firm anticipates that the final day of buying and selling on New York Inventory Alternate shall be on or about March 25, 2021.

On or about March 25, 2021, the Firm intends to file a Type 15 with the SEC, at which era the Firm anticipates that its obligations to file periodic stories underneath the Alternate Act, together with annual, quarterly and present stories on Type 10-Ok, Type 10-Q and Type 8-Ok, respectively, shall be suspended, and that every one necessities related to being an Alternate Act-registered firm, together with the requirement to file present and periodic stories, will terminate 90 days thereafter.

Following the deregistration, the Firm anticipates that its Widespread Inventory shall be quoted on the OTC Pink Open Market (the “Pink Sheets”), a centralized digital citation service for over-the-counter securities, as long as market makers show an curiosity in buying and selling within the Widespread Inventory. Nevertheless, the Firm may give no assurance that buying and selling in its Widespread Inventory will proceed on the Pink Sheets or some other securities trade or citation medium.

The Firm expects to file its 2020 Type 10-Ok by March 16, 2021, but it surely won’t distribute a This autumn 2020 earnings launch or host a convention name.

States impacted by the transitions
The 51 expert nursing and assisted/senior dwelling amenities leased from Welltower that shall be transitioned are situated within the states of Colorado (4), Connecticut (4), Delaware (3), Kentucky (5), Maryland (6), New Hampshire (3), New Jersey (17), Pennsylvania (7) and West Virginia (2).

About Genesis HealthCare
Genesis HealthCare is a holding firm with subsidiaries that, on a mixed foundation, gives companies to greater than 325 expert nursing amenities and assisted/senior dwelling communities in 24 states nationwide. Genesis subsidiaries additionally provide rehabilitation remedy to roughly 1,100 healthcare suppliers in 44 states, the District of Columbia and China.  References made on this launch to “Genesis,” “the Firm,” “we,” “us” and “our” check with Genesis Healthcare, Inc. and every of its wholly-owned firms. Go to our web site at www.genesishcc.com.

Genesis HealthCare Contact:
Investor Relations
610-925-2000

Ahead Wanting Statements
Sure statements on this launch represent “forward-looking statements” throughout the that means of the federal securities legal guidelines, together with the Non-public Securities Litigation Reform Act of 1995. You’ll be able to establish these statements by the truth that they don’t relate strictly to historic or present information. They comprise phrases akin to “might,” “will,” “mission,” “would possibly,” “anticipate,” “consider,” “anticipate,” “may,” “would,” “estimate,” “proceed,” “pursue,” “plans,” or “prospect,” or the unfavorable or different variations thereof or comparable terminology. All statements contained on this launch that don’t relate to issues of historic information must be thought-about forward-looking statements, together with statements about (i) our means to delist the Class A Shares from the NYSE; (ii) our means to deregister the Class A Shares and droop reporting obligations underneath the Alternate Act; (iii) estimates concerning the timing of the delisting and deregistration of Class A Shares; (iv) statements concerning the Second Closing which can or might not happen; and (v) statements concerning the Welltower transition of operations which can or might not happen. Buyers are cautioned that forward-looking statements aren’t ensures of future efficiency or outcomes and contain dangers and uncertainties that can’t be predicted or quantified and, consequently, the precise efficiency of Genesis might differ materially from that expressed or implied by such forward-looking statements.

Buyers and readers are cautioned to not place undue reliance on these forward-looking statements, that are primarily based on the Firm’s expectations as of the date of this launch and communicate solely as of the date of this launch and are suggested to think about the components listed underneath the headings “Ahead-Wanting Statements” and “Threat Elements” within the Firm’s filings with the SEC, together with the Annual Report on Type 10-Ok for the 12 months ended December 31, 2019. Genesis disclaims any obligation to replace its forward-looking statements or any of the knowledge contained on this launch besides as required by regulation.



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