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Market Overview

Genesis HealthCare Shares Are Trading Lower After Debt Restructuring Deal, Voluntary Delisting From NYSE

  • Welltower Inc (NYSE: WELLis cutting most ties with beleaguered Genesis HealthCare Inc (NYSE: GEN) and plans to terminate leases with Genesis for 51 of its properties and provide an $86 million lease termination fee upon their successful transition. 
  • Additionally, Genesis will conditionally receive approximately $170 million in additional debt reductions from Welltower.
  • Hence, Genesis expects to reduce its debt outstanding to Welltower by approximately $256 million and extend the maturity to January 1, 2024.
  • Welltower will also receive equity in Genesis, increasing its stake in Genesis from approximately 6% to about 15%.
  • It has also secured a $50 million debt investment from ReGen Healthcare that would convert into equity representing a 25% stake in the company.
  • ReGen Healthcare also has the option to make an additional debt investment of $25 million exercisable no later than March 31 and to be funded by April 15.
  • As part of the agreement, two Genesis Board Members, John F. DePodesta and Terry Rappuhn have relinquished their current positions. ReGen Healthcare has appointed David Harrington and John Randazzo, effective immediately.
  • Also, Mr. Harrington has been appointed Chairman of the Board.
  • Concurrently, Genesis intends to voluntarily delist from the New York Stock Exchange by March 25.
  • Following the deregistration, the company anticipates that its Common Stock will be quoted on the OTC Pink Open Market.
  • The company expects to file its 2020 Form 10-K by March 16, but it will not distribute a Q4 2020 earnings release or host a conference call.
  • Price Action: GEN shares dropped 35.9% at $0.52, and WELL stock is up 0.48% at $68.95 in market trading hours on the last check Wednesday.

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