Advocat Reaches Agreements With Major Lessor and Major Lender.Business Editors FRANKLIN, Tenn.--(BUSINESS WIRE)--Nov. 13, 2000 Advocat Inc. (Nasdaq OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :AVCA AVCA American Volleyball Coaches Association AVCA American Veterinary Chiropractic Association AVCA African Venture Capital Association AVCA Almaden Valley Community Association AVCA Automobil Veteranen Club Austria AVCA Apoyo Vital Cardiopulmonar Avanzado ) today announced that it has entered into amended agreements with its major lessor, Omega Healthcare Investors, Inc. ("Omega"), and its primary lender. The amended agreements restructure key leases and loans that the Company hopes will enable it to better cope with the financial difficulties being faced by it and the long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. profession in general. The effective date of the agreements is October 1, 2000. The settlement agreement between the Company and Omega includes a new 10-year master lease with respect to 60% of the Company's skilled nursing facility skilled nursing facility n. Abbr. SNF An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. portfolio. This new lease provides for a reduction in lease payments and permits the closing or alternative use of a limited number of facilities in exchange for Advocat issuing preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and a subordinated note to Omega. The Company and its lender entered into an amendment to the master credit agreement which restructures all current obligations into a $20.4 million line of credit with components that have maturities from January 15, 2002, through September 30, 2004. The amendment includes a reduction in interest rates, a continued working capital line and a reduction in the bank's commitment under letters of credit. The amendment will allow the Company to reclassify Verb 1. reclassify - classify anew, change the previous classification; "The zoologists had to reclassify the mollusks after they found new species" class, classify, sort out, assort, sort, separate - arrange or order by classes or categories; "How would you $13.6 million of outstanding debt as of September 30, 2000, from current maturities to long-term. Additionally, Advocat is actively negotiating with a mortgage lender with respect to the refinancing Refinancing An extension and/or increase in amount of existing debt. of an acquisition line of approximately $11 million with a maturity of November 30, 2000. This debt is secured by the assets of four facilities that are owned and operated by the Company. Commenting on these agreements, Charles W. Birkett, M.D., Chairman and Chief Executive Officer of Advocat Inc., said, "These new agreements will allow us to move forward with greater certainty of being able to withstand the significant regulatory and reimbursement pressures which are continuing to impact the long-term care profession. Through the hard work of our senior management group and the assistance of our professional advisors, including Houlihan Lokey Howard & Zukin, we have made a significant step to a more appropriate level of lease and debt costs. With these agreements now in place, we will be able to strengthen our focus on the operational aspects of our business." Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made in this release involve a number of risks and uncertainties, including but not limited to, factors affecting the long-term care industry in general, governmental reimbursement, government regulation, health care reforms, the impact of future licensing surveys, changing economic and market conditions and other risk factors detailed in the Company's Securities and Exchange Commission filings. Advocat Inc. operates 120 facilities including 56 assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. facilities with 5,472 units and 64 skilled nursing facilities containing 7,230 licensed beds as of September 30, 2000. The Company operates facilities in 12 states, primarily in the Southeast, and four provinces in Canada. For additional information about the Company, visit Advocat's web site: http://www.irinfo.com/avc. |
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