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Regional Health Properties Sells Three Properties for $26.1 Million and Extinguishes $24.7 Million in Secured Debt, Repaying "Pinecone" and Congressional Bank Loans in Full
ATLANTA, Aug. 2, 2019 /PRNewswire/ -- Regional Health Properties, Inc. (NYSE American: RHE) (NYSE American: RHEpA), a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term care, has completed the sale of three of the four skilled nursing properties located in Oklahoma, Alabama and Georgia, to affiliates of MED Healthcare Partners LLC ("MED"), as contemplated by the purchase and sale agreement previously disclosed by the Company in its Current Report on Form 8-K filed with the Securities and Exchange Commission on April 18, 2019.
The three properties were sold for the purchase price of $26.1 million in cash.
The Company and MED agreed to extend the closing date on the fourth property located in Oklahoma to August 28, 2019.
The Company used the cash proceeds from the sale to pay a net of approximately $1.0 million in outstanding interest, fees, and other costs and to repay $24.7 million in debt which was secured by the four skilled nursing facilities subject to the purchase and sale agreement. As a result of such repayment, the Company has extinguished all debt owing to Pinecone Realty Partners II, LLC ("Pinecone") and Congressional Bank. For a period of three months following such repayment, Pinecone will continue to hold a right of first refusal to provide first mortgage financing for any acquisition of a healthcare facility by the Company and an exclusive option to refinance the Company's existing first mortgage loan on the Company's facility known as Coosa Valley Health Care, subject to the terms and conditions of the applicable loan documents.
"The Company has accomplished a milestone with the successful completion of this sale transaction," stated Brent Morrison, Regional's Chief Executive Officer. "As a result, the Company was able to execute a deleveraging transaction by shedding some of its non-strategic business assets and repaying nearly $25 million of current debt outstanding, which includes full repayment of the Pinecone and Congressional loans, thus greatly improving the Company's overall balance sheet metrics, total book value, and overall cash position while having minimal impact to monthly cash flow. We also find ourselves in a good position to refocus our efforts on the Company's more strategic assets concentrated mostly in the south-east and mid-west United States as well as come to a final resolution for only a few remaining legacy lawsuits still outstanding."
Morrison concluded by saying, "The Company has encountered many complicated and difficult obstacles over the past few years, but management believes that many of these obstacles have now been resolved and the completion of this transaction represents a turning point for a new and bright future coming for the Company."