KENNETT SQUARE, Pa., Aug. 2 /PRNewswire/ -- ElderTrust (NYSE: ETT), an
equity healthcare REIT, today addressed a press release issued by its largest
tenant, Genesis Health Ventures, Inc. (NYSE: GHV). In its release, Genesis
announced an agreement in principle to a proposed restructuring of the
financial arrangements used for its 1997 investment in The Multicare Companies
(Multicare).
In 1997, Genesis joined with other financial partners to acquire
Multicare. Genesis initially acquired a 43% interest in Multicare and was to
become sole owner of Multicare at a later date through a cash payment or the
issuance of additional Genesis common shares at equivalent value. In the
proposed restructuring, Genesis will complete the Multicare acquisition
through the issuance of convertible preferred shares. The restructuring also
includes a $50 million cash investment in Genesis by the Multicare financial
partners in exchange for Genesis common shares and warrants. The transaction
is subject to, among other things, regulatory approval and GHV shareholder
approval.
"We view this as a significant step toward improving the financial
condition of our largest tenant," said D. Lee McCreary, Jr., ElderTrust's
Acting President and Chief Executive Officer. "We believed that the best
alternative for ElderTrust was for Genesis to resolve the Multicare situation
through an equity, as opposed to a cash payment, alternative. Coupled with
the $50 million cash infusion, the restructuring, if completed, also would
appear to enhance the Genesis credit profile. As our principle tenant,
ElderTrust is very pleased to see this announcement and wish Genesis the best
in its completion."
ElderTrust is a real estate investment trust that invests in real estate
properties used in the healthcare services industry, principally along the
East Coast of the United States. Since commencing operations in January
1998, the Company has acquired direct and indirect interests in 31 buildings
and has loaned $52 million in construction and term financing on 9 additional
healthcare facilities.
Certain matters discussed within this press release may be deemed to be
forward-looking statements within the meaning of the Private Securities Act of
1995. Although ElderTrust believes the expectations reflected in such
forward-looking statements are reasonable assumptions, it can give no
assurance that its expectations will be attained. Factors that could cause
actual results to differ materially from ElderTrust's expectations include
real estate conditions, the Company's ability to refinance its credit
facility, changes in the economic conditions and other risks detailed from
time to time in the Company's SEC reports and filings. The Company assumes no
obligation to update or supplement forward-looking statements that become
untrue because of subsequent events.
SOURCE ElderTrust
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Related links:
http://www.eldertrust.com
CONTACT:
D. Lee McCreary, Jr., Acting President &
Chief Executive Officer, and Chief Financial Officer,
610-625-4200
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