Centric Health Announces Proposed $15 Million Private Placement of Convertible Notes

TORONTO, May 4, 2012 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH), Canada's leading diversified healthcare services company, today announced that it is proposing to issue, by way of private placement, up to $15 million in subordinated unsecured convertible notes ("the Convertible Notes") and up to 4,050,000 warrants ("the Warrants").  The proceeds from the private placement will be used towards the repayment of Senior debt.  The financing has been approved by the independent members of Centric Health's Board of Directors.

The terms of the Convertible Notes include:

• Interest: 5.5% payable semi-annually;
  
  
• Term: 4 years;
  
  
• Centric Health can redeem the Convertible Notes in cash at any time on 30 days notice (holder can elect to convert during notice period);
  
  
• Holder has the option to convert the Convertible Notes into Centric Health common shares ("Common Shares") at approximately $0.93 per Common Share (being 110% of the volume weighted-average trading price of the Common Shares on the TSX for the five (5) trading days immediately preceding April 25, 2012 (the date the notice of the Offering was sent to the TSX));
  
  
• Centric Health has the election to settle the loan at maturity or pay interest in Common Shares at 95% of the volume weighted-average trading price of the Common Shares on the TSX for the five (5) trading days immediately preceding such date;
  
  
• The Convertible Notes rank behind all principal, premium (if any), and interest on all senior obligations of the Company including the preferred partnership units issued by the Company to Alaris Income Growth Fund Partnership; and
  
  
• Investors will be granted Warrants on the basis of 270 Warrants for every $1,000 of Convertible Notes purchased, such Warrants being exercisable over a 4 year period at an exercise price of approximately $0.93 per Common Share.

The Convertible Notes and Warrants will be sold on a private placement basis and will be subject to a hold period of four months plus one day from the date of issue.  Conditional regulatory approval was received from the TSX for the issuance of the Convertible Notes and the Warrants on April 27, 2012.  The Company is in the process of completing final documentation relating to the private placement.

The Company has received subscriptions for more than $15 million from a group of investors, including Centric Health's major shareholder and certain members of the Company's corporate management team, as well as the management of the businesses acquired by the Company over the past 12 months. Funds received to date are being held in escrow until closing of the private placement which is expected to occur early next week. 

For further information please refer to the Company's complete filings at www.sedar.com. 

About Centric Health

Centric Health's vision is to be Canada's premier healthcare company, providing innovative solutions centered on patients and healthcare professionals. As a diversified healthcare company with investments in several niche service areas, Centric Health currently has operations in medical assessments, disability and rehabilitation management, physiotherapy and surgical centres, homecare, specialty pharmacy, wellness and prevention and home medical equipment. With knowledge and experience of healthcare delivery in international markets and extensive and trusted relationships with payers, physicians, and government agencies, Centric Health is pursuing expansion opportunities into other healthcare sectors to create value for all stakeholders through an unwavering commitment to the highest quality of care. Centric Health is listed on the TSX under the symbol CHH. For further information, please visit www.centrichealth.ca and www.lifemark.ca. Centric Health's strategic advisor is Global Healthcare Investments & Solutions ("GHIS") (www.ghis.us). GHIS and entities controlled by shareholders of GHIS are currently the largest shareholders of Centric Health.

This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation.  These forward-looking statements include, among others, statements regarding business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits Centric Health will derive there-from.

Peter Walkey
Chief Financial Officer
Centric Health
416-619-9417
[email protected]
 
Lawrence Chamberlain
Investor Relations
TMX Equicom
416-815-0700 ext 257
[email protected]