Omega Healthcare Investors, Inc. announced Monday that a bankruptcy court will allow it to transition 23 of its 42 Orianna facilities to a new operator as part of the company’s restructuring.
The facilities are operated by 4 West Holdings, Inc., acting as Orianna. At the time of the Chapter 11 filing in March, Orianna owed $52 million in rent to Omega.
Omega had previously said that unpaid rent led to the restructuring, which also calls for Omega to sell off its 19 remaining Orianna-run facilities.
The U.S. Bankruptcy Court for the Northern District of Texas approved both of those steps on May 11.
The court also approved $30 million in new financing from Omega to Orianna, some of which Omega said had already been used to repay Orianna’s prior working capital lender. The money will also provide Orianna with operating cash. Orianna has locations in Georgia, Indiana, Mississippi, North Carolina, South Carolina, Tennessee and Virginia, according to its website.
“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,” Omega Chief Executive Officer Taylor Pickett said in a statement. “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.”
In that May 7 deal, Omega and Signature Healthcare entered into a consensual out-of-court restructuring agreement. Signature was reorganized to separate each of its primary portfolios with its three major landlords into distinct lease silos. Signature Healthcare’s Agemo will be the holding company of the lessees within Omega.
Omega agreed to defer up to $6.3 million of rent annually for three years; provide $4.5 million in capital funds annually for three years for improvements at 59 facilities; and extend a seven-year working capital term loan, the term of the master lease, and the maturity date of an existing term loan.