HealthSouth Corporation has completed the sale of five of its long-term acute care hospitals (LTCHs) to affiliates of LifeCare Holdings, Inc. for approximately $117.5 million, consisting of cash and retained working capital.
"The sale of these long-term acute care hospitals to LifeCare reinforces HealthSouth's strategic focus on our core inpatient rehabilitation hospitals," said HealthSouth President and Chief Executive Officer Jay Grinney. "We want to recognize and thank our highly skilled employees at these hospitals for their years of service and wish them the best under LifeCare's leadership."
The Company also announced that pursuant to the indenture governing the 10.75% senior notes, it has issued notice to the trustee that it is exercising its call option on the remaining $164 million of these notes. The call is expected to be completed on or about September 1, 2011, and inclusive of the call premium will require a cash outlay of approximately $175 million.
"We will use the proceeds from the sale of the LTCHs, revolver capacity, and cash on hand to fund the call," said HealthSouth Executive Vice President and Chief Financial Officer Doug Coltharp. "The sale of the LTCHs has accelerated our plan to eliminate the 10.75% senior notes and positions us to achieve our target leverage ratio of 3.0x during 2011. The removal of this expensive debt from our capital structure will have a favorable effect on our future free cash flow generation."
HealthSouth is the nation's largest owner and operator of inpatient rehabilitation hospitals in terms of revenues, number of hospitals, and patients treated and discharged. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, outpatient rehabilitation satellite clinics, and home health agencies. HealthSouth's hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, orthopedic, cardiac and pulmonary conditions, brain and spinal cord injury, and amputations. HealthSouth can be found on the Web at www.healthsouth.com.
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Healthcare Prospector identifies healthcare providers and other healthcare entities in transition. Coverage includes hospitals, nursing homes, long-term care facilities, physicians' medical groups, ambulatory care and outpatient centers, mental health facilities, healthcare real estate investment trusts (REITs), and medical laboratory and diagnostic imaging services.
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