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Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: Clint Fegan, CFO
Robert Sutton, Sr. VP
(717) 796-6100
BALANCED CARE ANNOUNCES AGREEMENT TO ISSUE
$14.0 MILLION IN CONVERTIBLE DEBENTURES
Mechanicsburg, PA, July 18, 2000----Balanced Care Corporation (AMEX:BAL), an
operator of assisted living communities and related services (the "Company"),
announced today that it has agreed to issue an aggregate 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 most recent transaction is
scheduled to close no later than July 31, 2000.
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 of the Debentures 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.
In an unrelated matter, the Company announced that it has completed the
acquisition of 10 special purpose entities that currently lease Outlook Pointe
facilities owned by Nationwide Health Properties, Inc.
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.
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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.
