Prime trust has written to its unit holders that it is selling 23 villages and a small number of non-core senior living class facilities as soon as practicable to reduce its debt load of $400 million. Currently the third largest stock exchange listed retirement living operator with some 4600 ILUs and 770 beds, the sale process will leave only 12 villages, representing 3600 ILUs. These 12 villages are managed by Lend Lease Primelife. The book value of the 23+ villages and facilities for sale is $180 million before discounts.
Prime had 12 of its villages revalued in December resulting in a 16% drop in value and another eight villages valued last month with a 15% reduction in value.
Before these discounted values the entire Prime portfolio was valued at $780 million; with a 15% discount their village stock is reduced to $663 million in value compared to the debt they carry of $400 million. If they can complete all the sales with just a 15% discount (a sale value of $153 million), they will have 12 villages valued at $510 million and debt of $220 million, or 43% of valuation.
Interestingly their stock rose 40% from $0.08 cents to $0.11 following the clarification of the sales (but based on small volumes however).
