Capital Senior Living on Tuesday filed a definitive proxy statement and issued a letter to shareholders in connection with its upcoming special meeting of stockholders, slated for Oct. 12. The goal of the meeting is to approve plans to raise up to $152.5 million through the private placement of convertible preferred stock to affiliates of Conversant Capital and a common stock rights offering to existing stockholders, which is contingent upon the closing of the private placement to Conversant.
Dallas-based Capital had announced plans in July to raise up to $152.5 million through the private placement of convertible preferred stock to affiliates of Conversant and that Conversant had agreed to backstop a rights offering and provide an incremental $25 million accordion for future investment.
Earlier this month, however, Ortelius Advisors, which has holdings equal to approximately 9% of Capital’s outstanding common stock, took steps to block the company’s planned transactions with Conversant Capital and its affiliates.
“As you may know, Ortelius Advisors is engaged in a misguided campaign to solicit votes against the transactions yet has not provided any path or vision to shareholders about how the company can survive, much less grow and thrive, in the absence of the transactions,” Capital’s board of directors said in Tuesday’s letter. “The transactions are essential to the company’s ability to meet its working capital and liquidity needs, to fortify its balance sheet, to solve its ‘going concern’ issue and to address upcoming debt maturities and other financial obligations.”