TORONTO, ON and HOUSTON, TX, Aug. 18 /CNW/ - Northstar Healthcare Inc. ("Northstar" or the "Company") (TSX:NHC) announced today that the Toronto Stock Exchange has denied Northstar's application, on the basis of its serious financial difficulty, for an exemption from the requirement to seek shareholder approval for the previously-announced private placement to Canada Healthcare Acquisition Inc., (the "Subscriber") a corporation indirectly controlled by Dr. Donald L. Kramer, M.D., a former CEO and former director of Northstar. The receipt of this exemption from the TSX is a condition to the closing of the private placement in favour of the Subscriber, failing which the Subscriber may elect to not complete the private placement.
Under the terms of the private placement agreement, if the private placement is not completed by September 30, 2010, Northstar will (i) use all commercially reasonable efforts to repay to the Subscriber the $1,016,150 advance on the $5 million subscription price received on August 4, 2010 to the extent such repayment would not reduce the Company's available unconsolidated corporate cash balance below $500,000, (ii) repay any shortfall by issuing common shares to the Subscriber at a per share price of $0.34 (to the extent such issuance is approved by the TSX without requiring shareholder approval), and (iii) repay any further shortfall by assigning 50% of Northstar's cash flow received from the Kirby ambulatory surgery centre until the advance is fully repaid, such assignment to be secured by a registered lien against Northstar's interest in the Kirby partnership.
The Company and the Subscriber are currently in discussions as to how or whether to proceed in light of the decision of the TSX and will make an announcement when appropriate.
About Northstar Healthcare Inc.
Northstar owns and/or manages ambulatory surgery centres in the United States, focusing initially on Houston and other metropolitan areas in Texas. The Company currently holds interests in two ambulatory surgery centres in Houston - a 70% partnership interest in The Palladium for Surgery - Houston and a 60% partnership interest in Medical Ambulatory Surgical Suites.
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of the Company and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Forward-looking information in this news release includes, without limitation, statements regarding management's beliefs, intentions, results, performance, goals, achievements, future events, plans and objects.
All forward-looking statements in this news release are qualified by these cautionary statements. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, should not be unduly relied upon and will not necessarily be accurate indications of whether or not such results will be achieved. Factors that could cause actual results to differ materially from the results discussed in the forward-looking statements, include, but are not limited to: the outcome of any appeal of the TSX's decision to not grant the exemption applied for or the outcome of discussions with Dr. Kramer. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to Northstar. Although the forward-looking statements contained in this news release are based upon what management believes are reasonable assumptions, Northstar cannot assure readers that actual results will be consistent with these forward-looking statements.
The forward-looking statements contained in this news release are made as of the date of this news release and should not be relied upon as representing Northstar's views as of any date subsequent to the date of this news release. Northstar assumes no obligation to update or revise these forward-looking statements to reflect new information, events, circumstances or otherwise, except as required by applicable law.
SOURCE Northstar Healthcare Inc.
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