An overwhelming 83.9% of Five Star Senior Living shares were voted in favor of a provision key to restructuring the company’s business arrangement with Senior Housing Properties Trust (SNH) at Five Star’s annual stockholders’ meeting on Tuesday, the Newton, MA-based company announced Wednesday.

The vote enables Five Star to issue its common stock to the real estate investment trust and its shareholders to carry out the restructuring plan announced in April. The operator also announced a new, $65 million senior secured credit facility and its intention to drastically reduce the number of shares of its common stock through a one-for-10 reverse stock split to regain Nasdaq listing.

“With yesterday’s vote, we reached an important milestone in completing our transaction with SNH and, when taken in combination with the new $65 million credit facility announced today, we believe these actions further solidify Five Star’s long-term financial outlook,” Five Star President and CEO Katherine Potter said Wednesday.

Effective Jan. 1, SNH will terminate the existing five master leases of 184 Five Star communities (19,979 units) as well as existing management agreements and pooling agreements affecting 77 communities (10,135 living units). They will be replaced with new management agreements for all 261 senior living communities owned by SNH and operated by Five Star.

Simultaneously, Five Star will issue common stock to SNH and SNH’s shareholders; their subsequent ownership of Five Star is expected to be approximately 34% and 51%, respectively.

SNH also will reduce Five Star’s indebtedness, if any exists, under a $25 million short-term credit facility provided by SNH to Five Star in connection with the restructuring transaction, will assume certain Five Star liabilities associated with the converted communities, or will make a payment to Five Star, all of which, in aggregate, will total $75 million. Currently, no amounts are outstanding under the SNH credit facility, according to Five Star.

The $65 million senior secured credit facility will mature June 12, 2021. For a fee, it can be extended for one year. Under certain circumstances, Five Star can borrow up to $165 million, the operator said.

Under the reverse stock split, expected to occur around 5 p.m. ET on Sept, 30, every 10 issued and outstanding shares of common stock will be converted into one share. Total outstanding shares are expected to be reduced from 50,878,492 to 5,087,849 shares.

“Our plan to complete a one-for-10 reverse stock split is designed to bring Five Star into compliance with Nasdaq listing standards, while allowing Five Star to target a broader group of investors, reduce trading costs for investors and lower administrative costs for the company.”

Also at the annual meeting, Bruce M. Gans, M.D. was re-elected as an independent director by a 74.5% vote.

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