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DJ HealthSouth/Interest Payment -2: To Make Upcoming Payments
BIRMINGHAM, Ala. (Dow Jones)--HealthSouth Corp. (HLSH) made a $117 million payment for all past due interest currently outstanding to its lenders and noteholders.
In a press release Tuesday, the healthcare services company said it had $445 million of cash prior to the interest payments.
This balance doesn't include any proceeds from pending asset sales, and the company said it currently intends to pay upcoming interest payments.
In addition, HealthSouth began discussions regarding an exchange offer for its 3.25% convertible subordinated debentures, which matured on April 1. The company owes about $344 million in principal to holders of its convertible subordinated debentures. HealthSouth anticipates the exchange offer to be conditioned upon, among other things, obtaining the requisite consents from its bank lenders and other noteholders.
Last month, two former HealthSouth executives agreed to plead guilty to fraud and cooperate with a Justice Department inquiry into alleged accounting irregularities. The fraud totals between $2.5 billion and $3 billion, based on findings by the Justice Department, the Securities and Exchange Commission and HealthSouth's new management. The investigation became public in mid-March after federal agents raided the company. A total of 14 former executives have agreed to deals with federal prosecutors.
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