• Northwest Healthcare Properties REIT (NWH.UN) is radically adjusting its balance sheet as the COVID-19 crisis worsens
  • The company plans to sell up to C$380 million in assets to reduce leverage and increase liquidity in the coming months
  • However, the company stated that its hospital and healthcare assets are unlikely to be impacted by country-wide lockdown laws
  • The company also plans on repurchasing up to 10 per cent of its public float, which recently dropped 48 percent
  • Northwest Healthcare Properties REIT (NWH.UN) was down 1.16 per cent, with shares trading for $6.77 and a market cap of $1.1 billion

Northwest Healthcare Properties REIT (TSX:NWH.UN), owner of a number of international hospitals, has responded to growing COVID-19 concerns.

Firstly, the company was quick to point out that no cases of COVID-19 have been reported from any of its facilities.

Paul Dalla Lana, CEO of Northwest, said the company’s main concern was community safety. He went on to say that the healthcare sector, while strained, will remain productive throughout the crisis.

“The REIT’s focus is on the cure segment of healthcare and specifically partnering with best-in-class hospital operators and government-funded public health systems.

“Those systems are essential to the delivery of primary and acute healthcare services and are vitally important as multiple nations respond to this global pandemic,” he said.

A number of other real estate trusts have been impacted by country-wide lock downs, which could increase in the coming months. However, hospitals and health centres will remain open, even under strict lockdown laws.

Therefore, a large portion of the company healthcare portfolio will remain active and shielded from an otherwise volatile real estate market.

Despite that stability, the company is planning to generate C$380 million to reduce leverage in the coming months. The money will be generated through assets sales, which are expected to finalise by the end of the second quarter.

Northwest has already sold a number of Australian and European assets for $237 million in net profit.

Through these sales the company has repaid or refinanced 77 per cent of its 2020 debt maturities. The remaining leverage will be refinanced over the coming months and the company is increasing its credit facility by $65 million.

Due to the recent market instability, Northwest’s share price has fallen by around 48 per cent. In order to capitalise on this, the company plans to repurchase up to 10 per cent of its public float.

Northwest is still awaiting TSX approval for the share repurchase.

Northwest Healthcare Properties REIT (NWH.UN) was down 1.16 per cent, with shares trading for $6.77 at 9:32am EST.

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