OHI Starts Transition of Orianna Portfolio, Restructures Signature Portfolio

HUNT VALLEY, Md. — Omega Healthcare Investors Inc. (NYSE: OHI) has received court approval to begin the transition its Orianna portfolio to new operators, following the bankruptcy filing of Orianna’s parent company, 4 West Holdings Inc.

Omega plans to transition 23 of its 42 Orianna-operated skilled nursing facilities to new operators. The other 19 will be sold. The United States Bankruptcy Court for the Northern District of Texas, which is presiding over Orianna’s reorganization under chapter 11 of the Bankruptcy Code, has approved the plan.

The bankruptcy court also approved the $30 million senior secured debtor-in-possession financing provided by Omega to Orianna, which has been used to repay in full Orianna’s prior working capital lender. The capital will also be used to provide Orianna with additional liquidity to fund ongoing business operations.

“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,” says Taylor Pickett, Omega’s CEO.

In a separate action, Omega also announced a planned restructuring of its portfolio currently leased to Signature Healthcare.

In the consensual, out-of-court agreement, Signature reorganized all of its portfolios with its three major landlords into separate lease agreements. Signature Healthcare formed Agemo to be the holding company of the lessees of the Omega portfolio.

In connection with the restructuring, Omega agreed to defer up to $6.3 million of rent for three years commencing. In addition, Omega will provide capital expenditure funds of approximately $4.5 million per year for three years to be used for the general maintenance and capital improvements of the 59 Omega-owned, Signature-leased facilities.

The deal also extends an existing working capital term loan issued by Omega, extend the master lease on the properties until 2030, and extend the maturity date of an existing term loan by two years.

Omega is a Hunt Valley-based, publicly traded REIT that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities.