Skilled Healthcare Group, Inc. (SKH) is in the process of restructuring its balance sheet, which will likely lead to company growth and SKH weighing options of where to take the business next, due to its 77% facility ownership, says Dana Hambly, Analyst at Stephens Inc.
“Skilled Healthcare Group I think has some operational challenges that they’ve been working through, but they are in the process of completely restructuring their balance sheet, and they’re going to basically turn most of their $450 million in corporate credit debt into HUD-insured debt, which should save them pretty substantially in interest expense. But more importantly, I think, once they get all of that done, it allows them to start growing the company again,” Hambly said.
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Skilled Healthcare Group owns 77% of its facilities, which provides them with numerous options of where to take the company next, Hambly says. He believes there is a possibility SKH will at some point pursue strategic alternatives.
“They have talked about it in the past; in April 2011 they announced that they were exploring strategic alternatives, and specifically whether they may somehow monetize their real estate or sell the entire company. I think as they get their balance sheet in order and can start demonstrating some growth again, there is optionality in that they may try to pursue strategic alternatives at some point in the future,” Hambly said.
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