Genesis Health Ventures Announces Sale of ElderCare Facilities and Other Assets to ElderTrust.KENNETT SQUARE, Pa.--(BW HealthWire)--Oct. 8, 1997--Genesis Health Ventures, Inc. (NYSE NYSE See: New York Stock Exchange :GHV GHV Genesis Health Ventures, Inc. GHV Gross Heating Value (relationship between volume and corresponding amount of energy for gas) ), a leading provider of eldercare eld·er·care n. Social and medical programs and facilities intended for the care and maintenance of the aged. services to older people and their families in the eastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , announced today that it has entered into a number of financing arrangements with ElderTrust, a newly-formed Maryland healthcare real estate investment trust, including: The sale/leaseback of three assisted and independent living centers and four skilled nursing facilities 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. to ElderTrust. Genesis will lease the 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. and skilled nursing facilities from ElderTrust pursuant to triple net leases with initial terms of 10 years. Genesis will also sell two office buildings and an investment in a subordinated note to ElderTrust. The Company will receive approximately $68 million in cash as a result of the sale of these properties and investments. The commitment to ElderTrust to borrow $42.9 million to finance the development and expansion of an additional eight assisted living facilities to be located in Genesis' existing regional market concentrations. This commitment is expected to be funded in the coming 18 months. Under the terms of these loans, Genesis is obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to sell these facilities to ElderTrust under sale/leaseback arrangements once defined occupancy targets have been reached or a specified time period has elapsed e·lapse intr.v. e·lapsed, e·laps·ing, e·laps·es To slip by; pass: Weeks elapsed before we could start renovating. n. . The refinancing by Genesis and an affiliate of approximately $16 million to fund term loans on existing facilities currently in the early stages of operations and to fund construction of properties currently under development. Under the terms of these loans, Genesis and its affiliate are obligated to sell these facilities to ElderTrust under sale/leaseback arrangements once defined occupancy targets have been reached or a specified time period has elapsed. "These transactions are consistent with our stated objective to reduce the leverage on our balance sheet and re-deploy our capital towards community-based and managed care services," commented George V George V, king of Great Britain and Ireland George V (George Frederick Ernest Albert), 1865–1936, king of Great Britain and Ireland (1910–36), second son and successor of Edward VII. . Hager, Genesis senior vice president and chief financial officer. "ElderTrust provides us with a source of capital as we continue to expand the Genesis ElderCare Network and strategic partnerships with other providers," Hager said. All of the above transactions are expected to take place by year end 1997 and are conditioned upon the successful completion of ElderTrust's initial public offering. These transactions are not expected to have a material impact on Genesis' revenues or earnings. Additionally, Genesis intends to enter into similar sale/leaseback arrangements for an additional $100 million in facilities in 1998. Genesis Health Ventures, Inc., a recognized innovator in the healthcare industry, was founded in 1985 to redefine how America cares for the elderly and is dedicated to helping older adults live a full life as independently as possible in their later years. The Company, which consolidated its businesses under the brand name Genesis ElderCare in 1996, has established Genesis ElderCare Networks in six regional markets in the eastern United States and currently serves more than 130,000 customers daily. CONTACT: George V. Hager Chief Financial Officer 1-800-444-6353 |
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