Invesque Inc. Provides Update on Transactions, Refinancings, and Update to Proposed Amendments to the Terms of Convertible Unsecured Subordinated Debentures and the Exchange of Preferred Shares for Common Shares
Transaction & Refinancing Updates
- On
September 23, 2024 , the Company sold a skilled nursing facility inIllinois forUS$16.5 million . Proceeds from the sale were used to reduce borrowings under theKeyBank credit facility. Following the completion of this sale,Invesque owns only two skilled nursing facilities. - On
October 15, 2024 , the Company sold seven seniors housing assets inMaryland (3),Virginia (3) andTennessee (1) that were previously managed by Commonwealth Senior Living ("CSL") forUS$65.4 million (US$184k per unit). The Company used sale proceeds to pay off the property level mortgage debt associated with the communities, and further reduce borrowings under theKeyBank credit facility byUS$6.1 million . The remaining cash in the amount ofUS$7.8 million was retained by the Company to maintain appropriate liquidity levels. - During the first three quarters of 2024,
Invesque has completed nearlyUS$270.0 million in refinancings, better positioning its balance sheet and current debt maturities. More thanUS$53.0 million of these refinancings have been on assets previously encumbered by the Company'sKeyBank credit facility, under which borrowings have been reduced by overUS$100.0 million to date in 2024. - The Company has entered into a definitive agreement to sell its interest in twenty seniors housing assets currently managed by CSL and the Company's interests in the CSL management company. The proposed sale transaction includes pricing above the Company's depreciated book value and after the release of
US$222.0 million in mortgage debt, the release ofUS$58.6 million in preferred equity plus any accrued and unpaid preferred return, and payment of other standard working capital adjustments, will provide cash proceeds which will be used to further reduce borrowings under theKeyBank credit facility and retained to maintain appropriate liquidity levels.Invesque expects this sale to close during the first quarter of 2025, subject to satisfaction or waiver of a due diligence condition in favour of the purchaser and other customary closing conditions. Accordingly, there is no certainty that this transaction will close on the expected timeline or at all.
Update to Proposed Amendments to the Terms of Convertible Unsecured Subordinated Debentures and the Exchange of Preferred Shares for Common Shares
Following the
The updated proposed amendments to the indentures governing the 2025 Debentures and the 2026 Debentures (the "Debenture Amendments"), if approved by the Debentureholders, will provide that:
- in exchange for the 2025 Debentures, Debentureholders of 2025 Debentures will receive (i) a pro rata interest of an aggregate principal amount of
US$9,938,000 in new unsecured subordinated debentures ("Amended Debentures") and (ii) 52,306,874 common shares of the Company ("Common Shares") having an aggregate value equal toUS$8,369,100 based on a price per Common Share ofUS$0.16 ; and - in exchange for the 2026 Debentures, Debentureholders of 2026 Debentures will receive (i) a pro rata interest of an aggregate principal amount of
US$17,362,000 in Amended Debentures and (ii) 88,210,068 Common Shares having an aggregate value equal toUS$14,113,611 based on a price per Common Share ofUS$0.16 (collectively, the "Debenture Exchange").
In connection with the updates to the Debenture Amendments described above, certain funds (the "Exchanging Magnetar Funds") managed by
All other terms of the Amended Debentures and the Preferred Share Exchange remain the same as previously outlined by the Company in its
The meetings of holders of each of the 2025 Debentures and the 2026 Debentures to approve the Debenture Amendments (the "Debentureholder Meetings") are scheduled to be held on
The meeting of holders of Common Shares to approve the Preferred Share Exchange and the issuance of Common Shares pursuant to the Debenture Exchange (the "Shareholder Meeting") is scheduled to be held on
CEO Remarks
"The CSL portfolio has been an important part of
About
The Company is a North American health care real estate company with an investment thesis focused on the premise that an aging demographic in
Forward-Looking Information
This press release (this "Press Release") contains certain forward-looking information and/or statements ("forward-looking statements"), that reflect and are provided for the purpose of presenting information about management's current expectations and plans relating to the future, including, without limitation, statements regarding the Company's utilization of proceeds of dispositions, statements regarding the closing of the sale of certain seniors housing communities, and statements regarding the Debenture Amendments, the Debenture Exchange and the Preferred Share Exchange. Forward-looking statements is typically identified by terms such as "anticipate," "believe," "continue," "expect," "expectations," "look," "may," "plan," "project," "should," "will," and other similar expressions that do not relate solely to historical matters and suggest future outcomes or events. Readers should not place undue reliance on forward-looking statements and are cautioned that forward-looking statements may not be appropriate for other purposes. Forward-looking statements in this Press Release are based on current beliefs, expectations, and certain assumptions of the Company's management, including assumptions regarding the Company's ability to complete the Debenture Amendments, the Debenture Exchange, the Preferred Share Exchange and the proposed asset sales and that existing trends being observed by the Company's seniors housing operating partners will continue. Forward-looking statements in this Press Release are subject to significant known and unknown risks, uncertainties, and other factors that are beyond the Company's ability to predict or control, and may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved.
Such risks include the risk that the Debenture Amendments will not be approved by Debentureholders or that the issuance of Common Shares pursuant to the Preferred Share Exchange and the Debenture Exchange will not be approved by shareholders or by the
There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which are given as of the date hereof, and not to use such forward-looking statements for anything other than the intended purpose. Further, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements contained in this Press Release are expressly qualified by this cautionary statement.
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