8-K: Current report filing

PRESS RELEASE - FOR IMMEDIATE RELEASE

Omega Healthcare Proposes to Raise $50 Million in New

Equity Capital

From its Current Stockholders

ANN ARBOR, MICHIGAN -- OCTOBER 30, 2001 -- Omega Healthcare Investors Inc.
(NYSE: OHI) announced today a plan to raise $50 million in new equity capital
from its current stockholders. The purpose of such offering is to facilitate the
company's reaching an agreement with its senior secured bank lenders regarding
the modification of their credit facilities and to enhance the company's ability
to repay approximately $108 million in debt maturing during the first half of
2002. Omega expects to use the proceeds from the offering to repay a portion of
the maturing debt and for working capital and other general corporate purposes.

Omega's plan to raise $50 million of new common equity consists of two
components: a $27.24 million rights offering to its common stockholders and a
private placement of at least $22.76 million to Explorer Holdings, L.P., Omega's
largest stockholder. In the rights offering, Omega plans to distribute one
non-transferable right to purchase one share of Omega common stock for every
2.15 shares of common stock held by stockholders at the close of business on
November 8, 2001 or such later date as the registration statement relating to
the rights offering is declared effective by the SEC. The number of rights that
each common stockholder will receive represents the stockholder's pro rata
portion on an as-converted basis of the $50 million Omega proposes to raise,
thereby allowing stockholders who fully participate in the rights offering the
opportunity to avoid any dilution in their ownership interest. The subscription
price for each right is expected to be $2.92 per share.

Explorer owns approximately 45.5% of Omega's issued and outstanding common
stock (giving effect to the conversion of Explorer's Series C convertible
preferred stock). The terms of Explorer's preferred stock give Explorer the
right to receive its pro rata portion on an as-converted basis of all dividends
paid to the holders of Omega's common stock, including the rights to be offered
in the rights offering. Explorer has agreed to waive this provision and will not
receive rights in the rights offering. Instead, Explorer has entered into an
agreement with Omega to invest at least $22.76 million, representing its pro
rata portion on an as-converted basis of the $50 million in new equity Omega is
seeking to raise, plus an amount equal to the subscription price of the shares
that are not subscribed for by Omega's stockholders in the rights offering.
Explorer has agreed to purchase its stock at the same price per share as is
offered to Omega's stockholders in the rights offering. As a result of
Explorer's commitment, Omega is assured of receiving the entire $50 million in
new equity capital it is seeking to raise if the rights offering and the private
placement to Explorer are completed.

Holders of Omega's Series A and B preferred stock will not be entitled to
participate in the rights offering since their security is not convertible into
common stock.

Omega's issuance of common stock to Explorer must be approved by Omega's
stockholders under NYSE rules. Omega intends to call a special meeting of
stockholders to seek approval of the issuance of common stock to Explorer among
other matters. If the issuance of common stock to Explorer has not been approved
by stockholders at the time of closing, Explorer will receive shares of a newly
created series of non-voting convertible preferred stock (having terms otherwise
substantially similar to Explorer's Series C preferred stock) which will
automatically convert into common stock upon receipt of stockholder approval at
the same price per share as is offered to Omega's stockholders in the rights
offering. Explorer has committed to vote its shares, representing approximately
45.5% of the voting shares, in favor of this proposal.

The closing of both the rights offering and Explorer's investment will
occur no later than ten business days following the expiration of the
subscription period for the rights offering. In addition to customary closing
conditions, the closings will be subject to Omega obtaining certain amendments
to its senior secured bank facilities and waiver of Omega's current
non-compliance with certain covenants on terms acceptable to Omega and Explorer.
Although Omega is in discussions with the lenders under such facilities, Omega
can provide no assurance as to whether satisfactory amendments and waivers will
be reached with such lenders or, if so, as to the terms thereof. In the event
such conditions are not satisfied, Omega will terminate the rights offering and
the private placement to Explorer.

A registration statement relating to the rights and the underlying common
stock has not yet been filed with the SEC. These securities, if registered, may
not be sold nor may offers to buy be accepted prior to the time the proposed
registration statement becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of such securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state. The offering will only be made by
means of a prospectus contained in a registration statement to be filed with the
SEC.

The securities to be sold to Explorer in the private placement have not
been registered under the U.S. Securities Act of 1933, as amended, and may not
be offered or sold without registration thereunder or pursuant to an available
exemption therefrom. Omega does not intend to register these securities.

Omega is a Real Estate Investment Trust investing in and providing
financing to the long-term healthcare industry. At September 30, 2001, it owned
or had mortgages on 246 skilled nursing and assisted living facilities with
approximately 25,400 beds located in 29 states and operated by 32 independent
healthcare operating companies.

This announcement includes forward-looking statements. Omega has based
these forward-looking statements on its current expectations and projections
about future events. Although Omega believes that its assumptions made in
connection with the forward-looking statements are reasonable, no assurances can
be given that its assumptions and expectations will prove to have been correct.
These forward-looking statements are subject to various risks, uncertainties and
assumptions. Omega undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this announcement might not occur. In
particular, there can be no assurance that Omega will be able to reach
acceptable agreements with its bank lenders, that the proposed rights offering
and private placement will be consummated or that the proceeds from such
offerings, together with the proceeds from anticipated asset sales and cash flow
from operations, will be sufficient to fully repay the indebtedness that matures
during the first half of 2002.

For further information contact:
Taylor Pickett at (734) 887-0200