Integrated Healthcare Holdings, Santa Ana, Calif., said that it has reached an agreement for up to $10.7 million in new investment from a large, controversial shareholder. Integrated plans to use the proceeds to pay down debt.
Under the agreement, Kali Chaudhuri has invested $3.7 million by exercising nearly 24.9 million warrants at 15 cents per share. Chaudhuri also paid $50,000 for the rights to buy more than 63 million shares at 11 cents apiece, or an additional investment of nearly $7 million. The purchase rights can be exercised between Aug. 1 and Jan. 10, 2009.
According to a securities filing, Chaudhuri already controlled nearly 40% of the company through his shareholdings and warrants to buy more shares. Chaudhuri initially was to have a larger financial role in Integrated when it bought its four hospitals from Tenet Healthcare Corp., Dallas, in 2005, but physicians at one of the hospitals objected to his role. Chaudhuri was chairman of a physician practice management company that shuttered a string of California clinics in 2000. -- by Vince Galloro