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HEALTH AND REHABILITATION PROPERTIES TRUST ANNOUNCES AN INVESTMENT PORTFOLIO REARRANGEMENT

 HEALTH AND REHABILITATION PROPERTIES TRUST ANNOUNCES AN
 INVESTMENT PORTFOLIO REARRANGEMENT
 NEWTON, Mass., May 12 /PRNewswire/ -- Health and Rehabilitation Properties Trust (NYSE: HRP) today announced that it has entered agreements to reduce the number of its health care facilities which are operated by companies affiliated with New MediCo Associates, Inc. (New Medico).
 Prior to these agreements, HRP owned eight health care facilities with 1,068 beds which were leased to New MediCo. In addition, HRP has provided mortgage financing for two facilities with 239 beds operated by New MediCo. HRP's total investment in these 10 New MediCo affiliated facilities is approximately $131 million. The rent and mortgage payments due from New MediCo to HRP is secured, among other collateral, by a pledge of 2 million HRP shares owned by New MediCo.
 Under the agreements announced today: (i) New MediCo will surrender leases on three facilities located in Louisiana, Michigan and Pennsylvania; (ii) HRP will transfer title to New MediCo to two rehabilitation facilities in Florida and Texas and those leases will be cancelled; (iii) HRP will pay New MediCo approximately $30 million; and (iv) New MediCo will transfer title to five additional rehabilitation and skilled nursing facilities, three in Massachusetts and two in Connecticut. As a result, HRP's total investment in New MediCo affiliated facilities will decline to approximately $50 million in five facilities. The 2 million shares of HRP owned by New MediCo will continue to secure rents and mortgage obligations due HRP.
 The facilities being acquired and surrendered from New MediCo will be simultaneously leased by HRP to affiliates of Greenery Rehabilitation Group, Inc. (NYSE: GRG). GRG currently leases five rehabilitation and skilled nursing facilities from HRP. At the conclusion of these transactions, HRP will lease 13 facilities to GRG.
 In making this announcement, Mark J. Finkelstein, president of HRP made the following statement:
 "Within the past several seeks there have been media reports which have raised questions about the quality of care offered at New MediCo facilities. Our own investigation has indicated that these charges appear to be unfounded. Nonetheless, the existence of such allegations and the governmental inquiries announced in their aftermath have raised questions about the long term financial strength of New MediCo. In particular, a recapitalization of New MediCo, by means of a public offering of common stock which had been planned earlier this year appears to have been indefinitely postponed. In these circumstances, HRP and New MediCo agreed to rearrange their business dealings in a way which will give New MediCo greater financial strength to withstand a possible drop in financial results, and, most importantly for HRP, in a way which greatly reduces HRP's exposure to any adverse developments which may result to New MediCo."
 "Greenery Rehabilitation Group, Inc. enjoys an excellent reputation in the medical and health regulatory communities. Although Greenery's financial performance has recently fallen below stock market expectations, Greenery has a strong, liquid balance sheet and the HRP facilities now leased to Greenery enjoy strong cash flow. Moreover, the eight former New MediCo facilities which will be leased to Greenery appear to enjoy strong, stable cash flows. HRP believes that Greenery will provide the highest quality of care at these facilities, that GRG will operate the facilities profitably, that Greenery has the financial strength to withstand any financial dips which may occur, and that these operations may help enable Greenery to regain some lost lustre in financial markets."
 The rents payable by Greenery to HRP for the eight facilities will be approximately $13 million per year. Greenery has agreed to post with HRP a lease security deposit of $7.5 million, which cash deposit also will secure Greenery's existing lease obligations to HRP, and all HRP leases to GRG will be subject to cross guarantees. A pro forma balance sheet and cash flow statement showing the impact on HRP of this transaction are attached hereto.
 HRP's spokesman stated that the foregoing transaction is subject to numerous governmental and health regulatory approvals and is not expected to be fully consummated until the third quarter of calendar 1992. Finally, the HRP spokesman stated that the documentation of this transaction also includes an option for HRP to further reduce or eliminate its investment in facilities operated by New MediCo in certain circumstances.
 HRP is a real estate investment trust headquartered in Newton, Mass. which invests in healthcare-related real estate throughout the United States. At the conclusion of this transaction, and of another $17 million investment in nursing and retirement facilities which was announced in April 1992, HRP will have investments of $363 million in 51 health care facilities in 16 states.
 HEALTH AND REHABILITATION PROPERTIES TRUST
 Summarized Statements of Income
 and Cash Flow Available for Distribution
 (amounts in thousands, except per share data)
 Pro Forma
 As Reported Adjustments Pro Forma
 Quarter Ended New MediCo/ Samaritan/ Qtr. Ended
 3/31/92 Greenery GranCare 3/31/92
 Total revenues $11,539 $260 $498 $12,297
 Total expenses 5,044 341-(a) 347-(b) 5,732
 Net income 6,495 (81) 151 6,565
 Weighted avg.
 shares outstndg 26,756 --- --- 26,756
 Earnings per share .24 --- --- .25
 Cash flow available
 for distribution 8,739 110 257 9,106
 Cash flow available
 for distribution
 per share .33 --- --- .34
 Annualized Pro Forma
 Quarter Ended
 March 31, 1992
 Total revenues $49,188
 Total expenses 22,928
 Net income 26,260
 Weighted average shares
 outstanding 26,756
 Earnings per share .98
 Cash flow available for
 distribution 36,424
 Cash flow available for
 distribution per share 1.36
 Notes: (a) Includes depreciation expense of $191.
 (b) Includes depreciation expense of $106.
 Summarized Balance Sheet
 (Dollars in thousands)
 Pro Forma
 Adjustments
 As Reported New MediCo/ Samaritan/ Pro Forma
 3/31/92 Greenery GranCare 3/31/92
 Real estate
 properties, net $267,550 $30,000 $16,750 $314,300
 Real estate mortgages 27,600 -- -- 27,600
 Other assets 42,525 (22,500) -- 20,025
 Total assets 337,675 7,500 16,750 361,925
 Bank borrowings 103,000 -- 16,750 119,750
 Other liabilities 2,038 7,500 -- 9,538
 Shareholders' equity 232,637 -- -- 232,637
 Total liabilities
 and shareholders'
 equity 337,675 7,500 16,750 361,925
 ADDITIONAL DATA: As Reported Pro Forma
 3/31/92 3/31/92
 Amount Percent Amount Percent
 Total Invested
 Assets:
 Continuing health
 companies $130,909 41 pct $49,600 14 pct
 Greenery 73,527 23 184,836 51
 GranCare 64,800 21 81,550 22
 Other (3 operators) 46,928 15 46,928 13
 Total $316,164 100 $362,914 100
 -0- 5/12/92
 /CONTACT: Mark J. Finkelstein, president, or David J. Hegarty, treasurer, 617-332-3990, both of HRPT/
 (HRP GRG) CO: Health and Rehabilitation Properties Trust ST: Massachusetts IN: HEA SU: TNM


DH -- NE003 -- 8922 05/12/92 08:03 EDT
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Date:May 12, 1992
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