Kennett Square, Pa.-based Genesis HealthCare will institute a three-pronged restructuring plan to improve its financial metrics and cut debt by $236 million, the company said March 3.
Genesis HealthCare is a holding company with subsidiaries that provide services to more than 325 skilled nursing facilities and assisted or senior living communities in 24 states.
As part of its financial improvement strategy, Genesis agreed to end master lease agreements at 51 assisted or senior living facilities leased from Welltower and transition them to new operators. Genesis expects to receive $86 million from the deal, which it will use to repay a portion of its debt obligations to Welltower.
Genesis will also receive $170 million in debt reduction from Welltower after completing the transaction.
The company also signed a definitive agreement for a capital infusion of $50 million from ReGen Healthcare, which ups its ownership interest in Genesis to 25 percent.
The third part of the strategy is that it will voluntarily delist its Class A common stock from the New York Stock Exchange and deregister its common stock under the Securities Exchange Act of 1934.
"The severity of the pandemic dramatically impacted patient admissions, revenues and costs, compounding the pressures of our long-term, lease-related debt obligations," said Genesis CEO Robert Fish. "These restructuring transactions improve the financial and operational stability of the company significantly and build on the encouraging signs we are seeing as COVID-19 case rates continue to materially decline and residents, patients and staff are vaccinated."