Omega Gets Approval to Transition Majority of Orianna Portfolio

Real estate investment trust (REIT) Omega Healthcare Investors (NYSE: OHI) received approval from the U.S. Bankruptcy Court for the Northern District of Texas to transition 23 of 42 facilities operated by its skilled nursing tenant, 4 West Holdings, Inc., to new operators.

4 West Holdings, known with its affiliates as Orianna Health Systems, entered Chapter 11 Bankruptcy in March.

The court granted approval on May 11 for Omega to begin the transition. It also approved the $30 million financing that Omega provided to Orianna. The funds were used to repay Orianna’s prior working capital lender in full; they will also provide additional liquidity to fund ongoing business operations.


In addition, the court approved procedures for soliciting competing proposals for the sale or restructuring of Orianna’s remaining 19 Omega facilities.

“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,” Omega CEO Taylor Pickett said in a press release announcing the court approvals. “Together with the restructuring of the Signature HealthCARE portfolio reported last week, we have made substantial progress in resolving the issues relating to these two portfolios.”

Louisville, Ky-based Signature had fallen about $25 million behind on its rent payments to the REIT by the end of the first quarter of this year, Omega Chief Financial Officer Robert Stephenson said in the company’s quarterly earnings call.


Under the restructuring deal, Omega will provide rent deferments up to $6.3 million per year for three years starting May 1, as well as capital expenditure funds of about $4.5 million per year for three years for general maintenance and improvements of the REIT’s 59 facilities.

It also extended a seven-year working capital term loan at 7% for up to $25 million and extended the term of the master lease to Dec. 31, 2030. Omega also extended the maturity date of the existing term loan by two years to Dec. 31, 2024.

Written by Maggie Flynn

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