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Saturday, May 28, 2022

Genesis healthcare Inc. (GEN) stock rise in after-hours. Why?


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Genesis Healthcare Inc. (NASDAQ: GEN) shows a rise in its stock in after-hours on Friday with no news available for this change in stock. The company deals with skilled nursing care facilities. Genesis healthcare is a holding company that provide assistance to more than 325 skilled nursing and senior living communities in 24 states of the country, with subsidiaries on combined basis. The company’s subsidiaries also provide rehabilitation facility to around 1100 healthcare providers in 44 states within the District of Columbia and China.

Recent developments

On March 3, Welltower Inc. announced that the company is going to end its ties with Genesis healthcare for 51 of its properties that will anyhow end its relationship with the challenged nursing home.

On the same day,Genesis healthcare announced its Strategic restructuring steps with the goal of improving and strengthening its balance sheet and chart path for recovery.  The plan has three parts which aims to better the company’s liquidity position. Given below are the three part of strategic plan:

  • Genesis has decided to end their master lease that was covering 51 facilities leased from affiliates of Welltower and also giver operations to new operators. This step taken by the company will result in Genesis to receive around $86million which they will use to repay a portion of its debt obligation to Welltower. With this, Genesis will also receive an additional amount of $170 million in the form of debt reduction from Welltower under certain conditions including the transition of 51 facilities.
  • Genesis has signed an agreement with ReGenHealthcare in which the company has decided to invest an amount of $50 million.
  • The company has also decided to expunge its Class A common stock from the New York stock exchange and also unregistered its common stock following the securities exchange act of 1934.

This change of relationship between Welltower and Genesis healthcare could might be the reason for the change in stock of GEN.

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