Regional Health Properties Inc (NYSEAMERICAN: RHE) is having an incredibly strong start to the trading session this morning, and for good reason. An SEC filing that’s circling the social space is making a bit of a buzz. Today, we’ll talk about:
- The filing;
- what we’re seeing from RHE stock as a result; and
- what we’ll be watching for ahead.
The SEC Filing Leading To The RHE Run
As mentioned above, Regional Health Properties is having a strong day in the market today as an SEC filing continues to rotate around the social realm. The filing first appeared around 3 p.m. yesterday, announcing and amended agreement.
In the filing, RHE announced that it has entered into a new amended and restated Forebearance Agreement with Pinecone Realty Partners II, LLC. Under the terms of the new agreement, Pinecone has agreed to forbear from exercising its default-related rights and remedies for a specified period fo time.
In the filing, the company said that the forbearance period under this new agreement will be effective from December 31, 2018 to March 14, 2019. However, the agreement can be terminated early as the result of specified termination events, including a default or event of a default under the loan agreement or the company’s failure to comply with the new agreement.
The company also said that the new agreement amends the loan agreement to require RHE to continue to retain the financial advisor as the Company’s chief restructuring officer and to hire a nationally recognized investment banker reasonably acceptable to Pinecone no later than January 7, 2019. This investment banker will advise the company’s board of directors on a potential asset sale and related transactions as well as perform valuation debt capacity analyses.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Regional Health Properties, the news proved to be overwhelmingly positive. After all, the new agreement will stop any default related issues under the loan agreement for a few months. At the same time, it will open the door to a potential asset sale or the takeover of the company. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:38), RHE is trading at $1.91 per share after a gain of $0.66 per share or 52.80% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on RHE. In particular, we’re interested in following the story surrounding the hiring of an investment banker to explore strategic options as it may result in an immediate return of value for investors. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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