TORONTO, Dec. 20, 2013 (GLOBE NEWSWIRE) -- GreeneStone Healthcare Corporation (OTCBB:GRST) ("GreeneStone" "GRST" or the "Company"), a provider of healthcare services including Addiction and Mental Health announced today that it has signed a conditional letter of intent, to acquire the property located at 3571 Highway 169, Bala, Ontario, which houses its In-Patient addiction treatment program (the "Clinic"). The Clinic is currently owned by Shawn Leon the Company president, Chief Executive Officer and founder of the GreeneStone addiction treatment program.
GRST entered into a five year lease for the Clinic in April 2011. Under the terms of the lease the Company has had an option to purchase the Clinic for a minimum of $4 million and a maximum of $8 million during the first two (2) years of the term and a minimum of $4 million and maximum of $10 million during the last three (3) years of the term. The price would be determined by an appraisal acceptable to both parties. The Company does not have the ability to pay cash for the Clinic but has agreed to terms for the purchase of the Clinic's holding company Cranberry Cove Holdings Ltd., from Leon with an approximate current debt of $4 million and an equity issue of $5 million for the aggregate consideration of $9 million. The Clinic was recently appraised at $10 million. This acquisition is conditional on shareholder approval and the Company will provide for a proxy under the SEC rules allowing all shareholders to vote on this matter.
The Company plans to refinance the Clinic for more than the $4 million of existing debt in order to increase the amount of cash available to pay off other pending liabilities and reduce the total monthly carrying cost of the Clinic by replacing the existing private lenders with an institutional lender.
Advanced discussions with institutional lenders have indicated that between $1 million and $3 million of additional secured borrowings could be made available to the Company. "Although higher loan to value ratios are available they would be more expensive and it is likely the Company will settle on a lower loan to value ratio at a lower cost. This would be keeping in line with the Board of Directors desire to avoid debt where possible. Ultimately this transaction will lower the monthly cost of carrying the property while providing the Company access to substantial new cash," stated Shawn Leon, the Company Chief Executive Officer.
The Company will be seeking shareholder approval for the consummation of the acquisition and is planning on holding a special meeting of shareholders early January of next year. Notice of the meeting with more details will be circulated to shareholders forthwith through our securities counsels at JSBarkats, PLLC (www.JSBarkats.com).
About GreeneStone Healthcare Corporation
GreeneStone Healthcare Corporation (OTCBB:GRST) operates medical and healthcare clinics in Ontario, Canada. GreeneStone's clinics serve to add overflow capacity to an increasingly stretched provincial healthcare system, and provide private alternatives to publicly available healthcare services. Its four medical clinics (three in Toronto, along with a facility in Muskoka, Ontario) offer various medical services, including addiction treatment, endoscopy, minor cosmetic procedures, and executive health care services. The Company currently has more than 60 employees and is based in North York, Ontario. For more information you can visit our website at www.greenestone.net.
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