Genesis in danger of losing NYSE listing

Company’s stock violated exchange’s rule for trading over $1 for 30-day period

KENNETT SQUARE » Genesis HealthCare said Wednesday it has been informed it is in danger of losing its listing on the New York Stock Exchange.

But the nursing home operator said it plans to take steps to address the exchange’s concerns and remain listed.

Genesis’s stock closed Wednesday at 69 cents a share, down 6 cents.

The company earlier this month announced a restructuring plan that it said would improve its financial picture. On Wednesday, it said it received written notification from the NYSE on Nov. 22 that it is out of compliance with a standard that requires a minimum average closing price of over $1 per share over a 30 trading-day period. Genesis is, however, in compliance with the NYSE minimum market capitalization threshold of $50 million over a 30 trading-day period. Currently, Genesis’ market capitalization is more than double the threshold, it said in its statement.

According to NYSE rules, Genesis can regain compliance with the minimum share price requirement if, during the sixmonth cure period following receipt of the notice, on the last trading-day of any calendar month, Genesis’ common stock has a closing share price and a 30 trading-day average closing share price of at least $1.

Genesis said it will notify the exchange on or before Dec. 7 it intends to meet the requirement.

“Reimbursement and occupancy challenges facing our entire industry have negatively impacted the Genesis HealthCare stock price and those of other providers in the industry,” said George V. Hager Jr., chief executive officer of Genesis. “We recently announced plans to restructure master leases and

loans which, if fully consummated, we believe will result in a significantly strengthened capital structure for the company and play a key role in long-term shareholder value. We are confident in our ability to address the listing standard deficiency.”

In addition to previously announced restructuring plans relating to certain master leases and loans, Genesis is considering further options to cure the continued listing standard deficiency, the company added in its statement.

The latest financial restructuring is “a huge, huge step for us bridging to the recovery and moving to the next cycle of this industry,” Hager told investors in early November.

Under the plan, two companies that Genesis leases properties from — Sabra Health Care REIT Inc. and Welltower Inc. — will sell certain properties to new owners who have agreed to lease them to Genesis at a lower rate.

If completed, the restructuring plans, which include debt restructuring and a pause in cash payments on certain debt, are expected to reduce the company’s current cash fixed charges between $80 million and $100 million annually.

Genesis said it believes the transactions could occur during the first half of 2018.

DIGITAL FIRST MEDIA FILE PHOTO Genesis HealthCare’s headquarters is in Kennett Square.