Coastal Physician Group signs definitive agreement to sell its Maryland clinic operations to HelixCare.

DURHAM, N.C.--(BUSINESS WIRE)--Sept. 16, 1996--Coastal Physician Group Inc. (NYSE: DR) announced that it has executed a definitive agreement to sell certain assets of Physicians Planning Group Inc. (PPG), its Maryland capitated clinic operations, to HelixCare Properties, LLC. HelixCare is an affiliate of Helix Health Inc., the largest integrated health care delivery system in the state of Maryland.

Coastal expects to realize approximately $17 million in net cash proceeds on a pre-tax basis, which will be used primarily to reduce bank indebtedness. The proposed transaction is subject to certain regulatory and other approvals, and is expected to close before the end of September. Specific terms of the transaction were not disclosed.

"This divestiture will be a significant milestone in Coastal's efforts to successfully execute the Company's previously announced turnaround plan," said Joseph G. Piemont, president and chief executive officer of Coastal Physician Group. "We intend to continue on our aggressive path toward revitalizing the Company through the sale of certain assets, while simultaneously improving Coastal's core operations and evaluating strategic alternatives to maximize shareholder value."

Coastal Physician Group Inc. is a diversified physician management company providing a broad range of health care and administrative services to physicians, hospitals, employers, managed care programs and other health care providers.

CONTACT: Coastal Physician Group Inc., Durham

Robert P. Borchert, 919/383-0355

or

HelixCare

Marybeth Morsberger/Jean Fleckenstein, 410/685-3390