Colorado-based helicopter ambulance business Air Methods has announced that it has entered into a Restructuring Support Agreement (RSA) with its creditors. Implementing the restructuring proposed in the RSA is planned to reduce the company’s total debt by approximately US$1.7 billion and increase liquidity. To implement the restructuring in the RSA, Air Methods and a number of its subsidiaries have filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of Texas.
The Chapter 11 process will see Air Methods implement its balance sheet restructuring efficiently and quickly. Additionally, the restructuring contemplated by the RSA provides for vendors and suppliers to be paid in full and for employees to continue receiving their pay and benefits without interruption. According to the RSA, the company has obtained support from its creditors for its plans and as a result, Air Methods expects to complete this process on an expedited basis and emerge from Chapter 11 by year-end.
The company says it has secured commitments of $80m in debtor-in-possession financing from the first lien lenders party to the RSA. Following court approval, this new financing will provide sufficient liquidity to support the company’s financial obligations and day-to-day operations during this process, including the payment of employee wages and benefits, suppliers, partners, and vendors in the ordinary course of business. The company says that all its EMS operations, which include 365 medical helicopters and fixed-wing aircraft from 275 bases serving 47 states and United Rotorcraft, continue to operate normally.
“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,” said Chief Executive Officer JaeLynn Williams. “Over the past year, we have made meaningful progress optimising our field operations, going in-network with leading commercial insurers and improving our cost structure. 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.”
