Sunrise will use $25 million of the proceeds to pay down its bank credit facility and will place $20 million into a collateral account for the benefit of other creditors. During the nine months ended September 30, 2009, the 21 communities registered $59 million in operating revenue, $42.7 million in operating expenses, $22.5 million in impairment charges, $4.5 million in depreciation expense and $3.2 million in interest expense--for a total $13.9-million net loss to Sunrise. Sunrise expects to record a gain of approximately $50 million in connection with the closing of this transaction. Sunrise did not return a call to GlobeSt.com in time for publication.
Sunrise has been struggling with financial difficulties and the portfolio sale is an important step in its restructuring process, CEO Mark Ordan says in a prepared statement. The proceeds "provide us with needed funds to pay down our bank line and with additional working capital," he says. Sunrise was advised on the sale by Goldman, Sachs and Co. Sunrise currently operates 382 communities in the United States, Canada, Germany and the United Kingdom, for a combined 40,175 units, according to its Web site.
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