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UPDATE 2-Sunrise Senior Living may have to file for bankruptcy

* Gets “going concern” notice

* Sufficient cash balance for operations till March 31

* May be forced to file for bankruptcy (Recasts first paragraph, adds company comment, restructuring expert comment; changes dateline, previous BANGALORE)

NEW YORK, March 2 (Reuters) - Sunrise Senior Living Inc SRZ.N may have to reorganize under bankruptcy protection if it cannot reach agreements with lenders to restructure debt, the company said in a regulatory filing, adding that it has sufficient cash balances to meet obligations through March 31.

The company, which provides senior living services, is looking to preserve cash, reduce financial obligations and reach negotiated settlements with creditors to preserve liquidity, it said in the filing with the U.S. Securities and Exchange Commission.

Sunrise said it may be forced to file for bankruptcy protection if it is unable to obtain necessary waivers or restructure its financial obligations.

The company noted in the filing that the economic downturn had caused the price of many stocks, including its own, to decline, and that credit was tight.

“I believe (this sector) is going to be the next wave of companies needing restructuring,” said Dominic DiNapoli, chief operating officer of FTI Consulting Inc. He said declines in the stock market and home values had affected Americans’ ability to pay for elder care services.

Already, the company has shuttered its Trinity Hospice Inc subsidiary and it has discontinued 215 development projects.


The company said it was in discussions with venture partners and third parties regarding the sale of certain assets to increase liquidity and reduce its obligations.

The company currently cannot borrow additional funds under the bank credit facility and has significant debt maturing in 2009 and 2010.

As of December 31, 2008, the company’s total debt was $636.1 million and had $29.5 million of cash and cash equivalents. It posted a net loss of $439.2 million for the year.

Net loss for the fourth quarter was $305.6 million or $6.07 a share, compared to a net loss of $124 million, or $2.48 a share, in the year-ago period.

Shares of Sunrise were down 26 cents, or 40 percent, at 40 cents in late afternoon trading on Monday. (Reporting by Chelsea Emery and Jennifer Robin Raj in Bangalore)