Regional Health Properties offers to swap 10.875% preferred shares for 12.5% preferreds

By Marisa Wong

Los Angeles, May 25 – Regional Health Properties, Inc. is offering to exchange any and all of the 2,811,535 outstanding shares of its 10.875% series A cumulative redeemable preferred shares (Cusip: 75903M200) for newly issued shares of 12.5% series B cumulative redeemable preferred shares, according to a press release.

The exchange consideration is one series B preferred share for each series A preferred share tendered.

The offer expires at 11:59 p.m. ET on June 27.

Tenders may be withdrawn at any time prior to the expiration of the offer.

As conditions to the exchange offer, the company is separately requesting that holders of the series A preferreds vote to approve an amendment of its amended and restated articles of incorporation.

The amendments involve the following: reducing the liquidation preference of the series A preferreds to $5.00 per share; eliminating accumulated dividends on the series A preferreds; eliminating future dividends on the series A preferreds; eliminating penalty events and the right of holders to elect directors upon the occurrence of a penalty event; reducing the redemption price of the series A preferreds in the event of an optional redemption to $5.00 per share; reducing the redemption price of the series A preferreds in the event of a change of control to $5.00 per share; and changing the voting rights of holders when voting as a single class with any other class or series of stock to one vote per $5.00 liquidation preference.

The series A preferreds (NYSE American: RHE-PA) had a last reported sales price of $4.74 per share on May 23.

The company expects to list the series B preferreds on NYSE American under the ticker symbol “RHEPrB.”

The proxy solicitor and information agent is Morrow Sodali LLC (800 662-5200 or 203 658-9400 for banks and brokers; RHE@investor.morrowsodali.com).

The Suwanee, Ga.-based company is a self-managed health care real estate investment company investing primarily in real estate purposed for senior living and long-term health care.

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