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Omega Signature Portfolio Restructuring Completed


Omega Healthcare Investors Inc. has received court approval to begin the orderly transition to new operators of 23 of the 42 facilities currently operated by its tenant, 4 West Holdings Inc. Court approval came on May 11, 2018, from the United States Bankruptcy Court for the Northern District of Texas, which is presiding over Orianna’s reorganization under chapter 11 of the Bankruptcy Code.

Also on May 11, the Bankruptcy Court approved on a final basis the $30 million senior secured debtor-in-possession financing provided by Omega to Orianna, which has been used to repay in full Orianna’s prior working capital lender and will also be used to provide Orianna with additional liquidity to fund on-going business operations.

Additionally, according to a prepared statement, the Bankruptcy Court approved procedures for the solicitation of competing proposals for the sale or restructuring of the 19 remaining Omega facilities currently operated by Orianna.

Taylor Pickett, Omega’s Chief Executive Officer, stated, “We are pleased to have completed this phase of the process and look forward to transitioning these 23 facilities to new operators. We remain confident that the 42 current Orianna facilities will generate rent or rent equivalents within our previously stated range of $32 million to $38 million upon completion of the planned transitions and sales.” Pickett continued, “Together with the restructuring of the Signature Healthcare portfolio reported last week, we have made substantial progress in resolving the issues relating to these two portfolios.”

Signature Healthcare Portfolio Restructuring

As previously reported in the company’s Form 10-Q filing last week, Omega and Signature Healthcare entered into a consensual out-of-court restructuring agreement on May 7, 2018. As part of the restructuring, Signature Healthcare was reorganized to separate each of its primary portfolios with its three major landlords into distinct lease silos. Signature Healthcare formed Agemo to be the holding company of the lessees of the Omega portfolio.

In connection with the Signature Healthcare restructuring, Omega agreed to: (1) defer up to $6.3 million of rent per annum for 3 years commencing May 1, 2018; (2) provide capital expenditure funds of approximately $4.5 million per year for 3 years to be used for the general maintenance and capital improvements of our 59 facilities; (3) extend a 7-year working capital term loan at 7% for an amount up to $25 million with a maturity date of April 30, 2025; (4) extend the term of the master lease by two years to December 31, 2030 and (5) extend the maturity date of the existing term loan by two years to

As part of the restructuring, Signature Healthcare entered into new working capital credit facilities with its new working capital lender for each of its separate silos, including Agemo.