Diversified Healthcare Trust Appoints Matthew Brown as CFO to Handle Pending Debt Maturities

by Jeff Shaw

NEWTON, Mass. — Diversified Healthcare Trust (NASDAQ: DHC) has made changes to its Board of Trustees and executive leadership team, amonth other actions, to address its near-term capital needs, including DHC’s pending debt maturities.

Phyllis Hollis has been appointed as an independent trustee of the DHC board. She previously worked as an executive at an investment bank and has extensive experience in finance and executing capital markets transactions. She will serve on DHC’s audit committee and compensation committee, which she will chair.

In addition, DHC has appointed Matthew Brown as chief financial officer and treasurer. He is a senior vice president of The RMR Group (NASDAQ: RMR), DHC’s parent company, where he oversees the accounting and finance functions. He is a certified public accountant and previously served as chief financial officer of Office Properties Income Trust (NASDAQ: OPI), another RMR company.

DHC also announced that B. Riley Securities has been engaged as its financial advisor to help it evaluate options to address near-term capital needs, including upcoming debt maturities. As previously disclosed, DHC is not and has not been for the past two years in compliance with the debt incurrence covenants in its bond indentures. As a result, DHC cannot incur new debt or refinance existing indebtedness. 

DHC has $700 million in indebtedness maturing in the first half of 2024 and has previously disclosed that it does not expect to be in covenant compliance until late 2024 at the earliest. In addition, DHC’s seniors housing operating portfolio (SHOP) requires significant capital investments over the next couple of years in order to effectuate a positive turnaround. 

Among the alternatives being considered to address DHC’s near-term capital needs are raising permissible new capital from investors and selling assets. DHC also plans to engage in discussions with its lenders regarding its bank debt maturing in January 2024.

Today’s actions follow the resignation of two of DHC’s Board members who served on the DHC board’s special committee in connection with DHC’s terminated merger with Office Properties Income Trust.Although the DHC and OPI merger was announced in April, it was canceled in September, likely due to lack of shareholder support for the move.

You may also like