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Westworld to Sell or Close 22 of Its Health Care Units

January 03, 1987|JEFF ROWE | Jeff Rowe is a free-lance writer

Financially stricken Westworld Community Healthcare Inc. said it will close or sell 22 of the 40 health care facilities it operates in rural areas around the nation.

The Lake Forest-based company also said its bankers, led by Bank of America, agreed to boost its credit line from $60 million to about $70 million, an increase contingent in part on Westworld's decision to sell certain of its operations that were losing money.

Disposal of some of its health care operations plus some other business interests, which include a medical air rescue operation in South Dakota, will result in a "substantial" one-time charge for the fourth quarter of 1986, the company said.

Westworld officials said they could not estimate the size of the charge but said results for the fourth quarter and year would be completed by mid- to late February.

For the first nine months of 1986, the company reported a net loss of $1.8 million. In reporting the losses late last year, the company cited the downturn in agriculture and oil and lower Medicare reimbursements.

As part of its plan to restructure its debt, Westworld said also that it is "actively pursuing" an exchange offer with holders of its long-term notes and debentures.

"It is presently anticipated that debt holders would be offered new debentures with a significant equity participation, including permitting the company to pay interest with its common stock," said Stephen F. Arterburn, president and chief executive officer. As reported, the company said interest due Dec. 1 on $35 million worth of debentures will be accounted for in the exchange offer.

Westworld has about 8.1 million common shares outstanding.

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