ProMedica has continued to offload nearly all of its nursing homes while also securing an extension on a loan payoff on $453 million in privately held debt.
The quarterly disclosure for the Toledo, OH-headquartered company filed June 30, shows the company retains just two skilled nursing facilities among its varied holdings. One that it wholly owns in Florida and another it jointly operates in Ohio. Combined, the two locations have 213 beds, according to the financial filing.
This is down from more than 400 senior care facilities that served 200,000 patients and residents five years ago when ProMedica acquired HCR ManorCare, then the nation’s second-largest provider of post-acute services and long-term care.
“ProMedica continues to take strategic action to strengthen our financial position and build greater stability and sustainability throughout the organization,” a statement from the company provided to McKnight’s Long-Term Care News on Tuesday. “That action has included divesting nearly all of our skilled nursing facilities, enabling us to commit more attention, time and resources to our core health system operations.”
In November, McKnight’s reported that ProMedica transferred 147 skilled nursing facilities into a joint venture between Welltower and Integra Health as part of a planned financial turnaround due to “ongoing operating losses within its Senior Care Division.” That transfer was scheduled to take effect on Dec. 19, 2022. ProMedica said at the time that it would continue operating 10 SNFs.
The June 30 financial report notes that the transfer of 14 SNFs in California, Maryland, and South Carolina remain in process with “negotiations with potential new owners/operators ongoing.” ProMedica has set aside a portion of its operating reserve to fund those SNFs through Sept. 30, 2023, if necessary. Until that transfer is completed, the facilities remain on ProMedica’s balance sheets.
“While ProMedica management believes that the earmarked amount will be sufficient to cover any operating losses during the Interim Period based on historical financial results, no guarantee can be made that the earmarked amount will be sufficient to cover all operating losses if future results are materially different,” the report said.
The Toledo Blade reported that ProMedica signed a tentative agreement with Atlanta-based Gentiva for $710 million for its home health and hospice business. It planned to use $453 million from that sale to pay off lenders after violating its loan terms due to declining cash and assets, but the sale is taking “longer than anticipated as regulators weigh the implications of the deal on competition in various markets,” the Blade said.
ProMedica spokeswoman Tausha Moore declined to comment to McKnight’s on possible options if the sale does not go through.
The original payback date on the debt was Aug. 17, but lenders agreed to extend that to Aug. 31. Another extension is possible.
“ProMedica and the financial institutions holding its privately placed debt are actively negotiating further extensions of the covenant suspension to provide more time to address regulatory approval for the proposed home health and hospice sale,” the statement provided to McKnight’s said. “Simultaneously, ProMedica is working diligently to move the transaction forward as quickly as possible. It would be premature to speculate on a close date for the transaction at this time.”
