SUNLINK ANNOUNCES FINANCING FOR MOUNTAINSIDE REPLACEMENT HOSPITAL
Atlanta, Georgia (October 8, 2002) - SunLink Health Systems, Inc. (AMEX: SSY) announced that it closed a $6 million secured financing facility with the Bank of North Georgia for its Mountainside Medical Center replacement hospital currently under construction in Jasper, Georgia. The replacement hospital is scheduled to open in May 2003. The Bank of North Georgia financing facility includes a construction loan of up to $6 million with interest at prime plus 1% per annum. SunLink has funded the construction costs to date from internal funds and expects to fund additional construction costs from availability under its revolving credit agreement.
The Bank of North Georgia financing facility also includes a 20-year mortgage loan with interest at prime plus 1% per annum or, at SunLink's option, interest at the 5-year U.S. Treasury Constant Maturity Yield plus 3 ½%. The mortgage loan interest rate is adjustable every 5 years. The construction loan may be converted to the 20-year mortgage loan three months after completion of construction, subject to certain conditions.
The facility requires SunLink to comply with certain conditions and covenants including hospital financial and operational covenants, information requirements and limitations on secured debt by the hospital subsidiary. SunLink expects funding under the construction loan to commence during its third fiscal quarter ending March 31, 2003.
SunLink Health Systems, Inc. operates six community hospitals and related businesses.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding the Corporation's business strategy, capital needs and financing initiatives. These forward-looking statements are subject to certain risks, uncertainties and other factors, which could cause actual results, performance and achievements to differ materially from those anticipated. Certain of those risks, uncertainties and other factors are disclosed in more detail in the Corporation's Annual Report on Form 10-K for the year ended June 30, 2002.