Ortelius urges Capital shareholders to vote against the company’s proposed capital increase – business daily news
Ortelius Advisors continues to oppose Capital Senior Living’s proposal to raise up to $ 152.5 million through the private placement of convertible preferred shares with affiliates of Conversant Capital and urges other shareholders to s ‘unite against the proposed transactions.
Ortelius, who owns about 12.7% of the outstanding common shares of Dallas-based Capital Senior Living, released a detailed presentation on Wednesday encouraging shareholders to vote against the proposal at the special meeting on October 12.
“Our detailed presentation demonstrates that the Board of Directors of Capital Senior Living applied a very imperfect process to assess the capital needs and financing options of the business,” said Peter DeSorcy, Founder and Managing Member of Ortelius . “Fortunately, shareholders can reject the proposed transactions at the next special meeting and put the company in a position to assess what we believe are readily available and viable financing alternatives.”
Among these alternatives, DeSorcy reiterated the investment firm’s willingness to support a new equity offering of up to $ 70 million CSL raises $ 70 million in the fourth quarter, and Ortelious believes others investors, including Caligan Partners, would also be interested in participating as a backstop. for the offering of rights.
In response, the board of directors of Capital Senior Living sent a letter to shareholders on Tuesday encouraging them to approve Conversant’s transactions.
“Failure to approve the transactions would leave the company with insufficient liquidity to meet its short-term debt obligations and necessary capital expenditures and endanger the survival of the company, which could lead to insolvency relief, “they wrote. “A vote against trading is not a vote FOR anything – other than a bet on an uncertain future.”
“With the help of our advisors at leading investment bank Morgan Stanley, we thoroughly assessed all potential strategic and funding alternatives – including a sale of the entire company – during several years. Transactions represent the only viable path forward, ”wrote the directors of Capital Senior Living.
Capital Senior Living closed August with its sixth consecutive month of growth, with an occupancy rate of 81.2%, the company said in a business update on Tuesday. This percentage represents an increase of 590 basis points (5.9%) from the low pandemic average monthly occupancy rate of 75.3% in February.