Diversified Healthcare Trust Announces Board and Leadership Updates and Actions to Address Near Term Capital Needs, Including Pending Debt Maturities
26 Septembre 2023 - 10:15PM
Business Wire
Phyllis Hollis Appointed Independent
Trustee
Matthew Brown Appointed CFO, Effective October
1, 2023
B. Riley Securities Engaged as Financial
Advisor
Diversified Healthcare Trust (Nasdaq: DHC) today announced
changes to its Board of Trustees and executive leadership team, and
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, effective September 26, 2023. Ms. Hollis previously
worked as an executive at an investment bank and has extensive
experience in finance and executing capital markets transactions.
Ms. Hollis will serve on DHC’s Audit Committee as well as its
Compensation Committee, which she will chair.
Adam Portnoy, Chair of DHC’s Board, made the following
statement:
“On behalf of the DHC Board, I am excited to
welcome Phyllis as our newest Board member. Phyllis is a recognized
industry veteran with substantial executive and finance experience.
We look forward to drawing on her insights and perspectives as we
consider alternatives to address DHC’s near term financing needs
and generally oversee DHC’s path forward.”
In addition, DHC has appointed Matthew Brown as Chief Financial
Officer and Treasurer, effective October 1, 2023. Mr. Brown is a
Senior Vice President of The RMR Group (Nasdaq: RMR) where he
oversees the accounting and finance functions. Mr. Brown is a
certified public accountant and previously served as Chief
Financial Officer of Office Properties Income Trust (Nasdaq:
OPI).
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 Senior Housing Operating
Portfolio, or SHOP, requires significant capital investments over
the next couple of years in order to effectuate a positive
turn-around in the SHOP business. 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. Both Board members stated in their resignation
letters that their resignation was not a result of any disagreement
with the Company. Following Ms. Hollis’s appointment, the DHC Board
is now comprised of six Trustees, 67% of whom are Independent
Trustees, 50% of whom are women and 33% of whom are from
underrepresented communities. The DHC Nominating and Governance
Committee has retained Korn Ferry, a leading executive search firm,
to support its search for additional Independent Trustee candidates
as part of its Board refreshment process.
About Diversified Healthcare Trust:
DHC is a real estate investment trust focused on owning
high-quality healthcare properties located throughout the United
States. DHC seeks diversification across the health services
spectrum by care delivery and practice type, by scientific research
disciplines and by property type and location. As of June 30, 2023,
DHC’s approximately $7.1 billion portfolio included 376 properties
in 36 states and Washington, D.C., occupied by approximately 500
tenants, and totaling approximately 9 million square feet of life
science and medical office properties and more than 27,000 senior
living units. DHC is managed by The RMR Group (Nasdaq: RMR), a
leading U.S. alternative asset management company with
approximately $36 billion in assets under management as of June 30,
2023, and more than 35 years of institutional experience in buying,
selling, financing and operating commercial real estate. To learn
more about DHC, visit www.dhcreit.com.
Warning Concerning
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other securities laws. Also, whenever DHC uses words such as
“believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”,
“will”, “may” and negatives or derivatives of these or similar
expressions, it is making forward-looking statements. These
forward-looking statements are based upon DHC’s present intent,
beliefs or expectations, but forward-looking statements are not
guaranteed to occur and may not occur. Actual results may differ
materially from those contained in or implied by DHC’s
forward-looking statements as a result of various factors. For
example: (a) the statements in this press release regarding DHC’s
consideration of alternatives and evaluation of options to address
its near term financing needs, including its upcoming debt
maturities, may imply that DHC will be able to raise permissible
new capital from investors and sell assets, refinance its debt and
effectuate a positive turn-around in its SHOP business; however,
DHC may not be able to raise capital from investors, sell assets
and/or refinance its debt on the terms it expects, or at all.
Further, DHC may be not be able to meet the capital investment
requirement to effectuate a positive turn-around in its SHOP
business; (b) DHC expects that the earliest it will be in
compliance with its debt incurrence covenants is late 2024;
however, there is substantial risk that DHC may take longer than
late 2024 to be in debt incurrence covenant compliance and able to
refinance or issue new debt; and (c) the DHC Board may not be
successful in its search for additional Independent Trustee
candidates as part of its Board refreshment process.
The information contained in DHC's periodic reports filed with
the Securities and Exchange Commission, or the SEC, including under
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” or incorporated
therein, also identifies important factors that could cause DHC's
actual results to differ materially from those stated in or implied
by DHC's forward-looking statements. DHC's filings with the SEC are
available on the SEC's website at www.sec.gov.
You should not place undue reliance upon any forward-looking
statements. Except as required by law, DHC does not intend to
update or change any forward-looking statements as a result of new
information, future events or otherwise.
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Investor Contact Melissa McCarthy, Manager, Investor
Relations (617) 796-8234
Media Contact: Andrew Siegel / Lucas Pers Joele Frank
212-355-4449
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