Air Methods files for prepackaged Chapter 11 bankruptcy protection
US air ambulance company Air Methods has filed for prepackaged Chapter 11 bankruptcy protection. The company entered a Restructuring Support Agreement (RSA) with a majority of its stakeholders to significantly reduce debt and increase financial flexibility yesterday. The company is continuing to operate normally during the financial restructuring and expects to complete the process by the end of the year.
As part of the restructuring agreement, the company’s debt will be cut by about $1.7bn. Liquidity will benefit from $80m of debtor-in-possession financing from the first lien lenders. Air Methods claimed the RSA would position the business for long-term success and enable it to focus on growth and development.
JaeLynn Williams, CEO, Air Methods, said in a statement: “We are pleased to have reached this agreement with our key stakeholders, which will enable Air Methods to continue supporting patients with lifesaving care and serving as an integral link between the nation’s top healthcare facilities and people in rural and remote communities.”
During the past year, the company had made significant progress optimising its field operations, going in-network with commercial insurers and improving cost structure, she said. “We’ve also seen record numbers of transports, and we’ve opened several new bases across the country this year as there is a great demand for air medical services. By strengthening our balance sheet, we are taking an important step forward in delivering on our transformation plan while answering every call with the highest level of service and patient care.”
The business headquartered in Englewood, Colorado operates a fleet of 365 helicopters and fixed wing aircraft in medical configuration from 275 bases serving 47 US states.
Legal adviser to Air Methods is Weil, Gotshal & Manges. The company’s investment banker is Lazard.
Meanwhile, today’s Helicopter Uplift newsletter will probe the reasons behind Air Methods’ decision and what happens next for the company. Request your free newsletter here.