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Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: Clint Fegan, CFO
Robert Sutton, SVP
(717) 796-6100
BALANCED CARE ANNOUNCES CLOSING OF
$14.0 MILLION IN CONVERTIBLE DEBENTURES
Mechanicsburg, PA, August 1, 2000----Balanced Care Corporation (AMEX:BAL), an
operator of assisted living communities and related services (the "Company"),
announced today that it has completed the sale and issuance of $14.0 million in
convertible debentures (the "Debentures") to HR Investments Limited, RH
Investments Limited and VXM Investments Limited (collectively, the "Holders"),
companies associated with IPC Advisors S.A.R.L. ("IPC"). IPC, a Luxemburg
Company, is owned by a trust whose beneficiaries include members of the family
of Mr. Paul Reichmann. IPC invested $21.0 million in the Company in December
1999, representing a 49% common equity interest.
The Debentures carry a 9.5% coupon, a five-year term, and a conversion price of
$2.00 per share (the "Conversion Rate"). Interest is payable quarterly in cash
or at the Company's option, in lieu of payment, may be added to the outstanding
principal amount of the Debentures. The Holders may convert the Debentures into
shares of common stock at the Conversion Rate at any time; provided, however,
the Company has the right to terminate the conversion right at any time after
December 31, 2002, provided certain conditions are satisfied. Depending on when
the Debentures are converted and how the Company elects to pay interest, IPC,
the Holders and certain other companies associated with the foregoing could own
between approximately 58% and 62% of the equity of Balanced Care on a fully
diluted basis.
Brad Hollinger, Chairman and Chief Executive Officer of Balanced Care stated:
"The additional capital will help us maximize the embedded value of our
portfolio of 68 communities. Upon maturity, these assets are projected to
generate over $50 million of EBITDAR annually. To accomplish this objective we
have channeled our human and capital resources into resident census growth,
resulting in a net resident gain of over 100 residents per month for the fiscal
year ended June 30, 2000. This represents a total increase in residents of 64%
over the prior year, from 1,946 to 3,199 residents. In addition to intense focus
on resident census, the Company will continue its strategic initiatives of
acquiring Outlook Pointe properties currently leased, purchasing special purpose
entities (i.e. "Black Boxes") and building the Outlook Pointe brand. The Company
has benefited substantially through its association with IPC and we look
forward, with their assistance, to being a platform for continued expansion in
the U.S."
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Balanced Care currently operates 66 facilities with system-wide capacity of
4,542 residents. After completion of two facilities currently under
construction, the Company will operate 68 facilities with resident capacity of
4,727.
Balanced Care Corporation provides senior care services that include assisted
living, independent living, specialized dementia services and, in certain
markets, extended care. The Company utilizes assisted living facilities as the
primary service platform to provide an array of health care and hospitality
services, including preventive care and wellness, medical rehabilitation,
Alzheimer's/dementia care and extended care services.
Except for the historical information contained in the press release, the
matters discussed herein contain forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from expectations. These include risks associated with, among other
things, substantial debt and operating lease payment obligations, managing rapid
expansion, the need for additional financing, the possibility of rising interest
rates, securing necessary licensing and permits, construction delays, cost
increases on new construction and increased competition. These and other risks
are set forth in the Company's Annual Report on Form 10-K (as amended) for the
fiscal year ended June 30, 1999 and other reports filed with the Securities and
Exchange Commission.
