Westworld Community Healthcare Inc. said Tuesday that it will extend the deadline for its offer to exchange $65 million in "junk-bond" debt to March 27.
The troubled Lake Forest operator of rural hospitals and clinics originally had set Tuesday as the last day for bondholders to swap their old debt for new low-interest bonds and common stock. Interest on the new bonds will be payable in either cash or stock, Westworld said.
So far, $3.9 million in bond debt has been tendered under terms of the exchange offer, company spokesman Glenn Caster said. He added that Westworld may extend the deadline beyond March 27, if necessary.
Assisted by the New York investment firm of Drexel Burnham Lambert, Westworld sold $30 million in 14.5% subordinated notes and $35 million in 14.375% subordinated debentures two years ago to finance its expansion binge.
Since Dec. 1, the company has been in default on a $2.5-million interest payment due on its $35 million in subordinated debentures. A $2.2-million interest payment on Westworld's $30 million in subordinated notes becomes due on April 1.
Founded in 1982, Westworld swelled to 38 hospitals and 133 specialty clinics in 15 states by early 1986. Struggling to retrench, Westworld now operates 16 hospitals and 40 clinics in eight states.