What’s next for LifeNet of New York? Last weekend reports surfaced that LifeNet’s parent company, Air Methods, was facing financial uncertainty. Days later, the company announced a major agreement with lenders to restructure debt, and ensure operation continues.
Company officials said in an announcement on Tuesday though that services would be maintained, despite Air Methods entering into a restructuring phase.
All told, a majority of creditors have agreed to a proposed reorganization that amounts to a debt reduction of $1.5 billion, bringing it’s total debt down to $533 million from an original $2.24 billion.
Air Methods says the structured financial reorganization is targeting its balance sheet and enhanced liquidity as the process unfolds.
In partnership with major first lien lenders, bondholders, and its equity sponsor, the company aims to fast-track a balance sheet overhaul, expecting a debt reduction of about $1.7 billion. This initiative is poised to aid the company’s focus on expansion and developmental pursuits.
CEO JaeLynn Williams expressed her optimism about the strategic move, pointing out the firm’s recent strides in optimizing operations, collaborating with premium commercial insurers, and enhancing their cost framework. “This year, we’ve noted an unprecedented surge in our transport numbers and inaugurated multiple new stations countrywide in response to the rising demand for our air medical services,” Williams said.
To facilitate this restructuring, Air Methods, along with some affiliated entities, has commenced voluntary prepackaged Chapter 11 cases at the U.S. Bankruptcy Court, Southern District of Texas. The designed structure of this process ensures that vendors and suppliers get their full dues, while the company’s employees continue to receive their salaries and benefits uninterruptedly. Given the wide support from its stakeholders, Air Methods is confident about an expedited conclusion to this procedure, with hopes of emerging from Chapter 11 by the close of the year.
Williams further emphasized the restructuring’s long-term vision, stating, “Enhanced financial flexibility coupled with broader capital access will empower us to broaden our operational bases, hasten our talent onboarding endeavors, and empower more emergency staff with the necessary skills to provide superior air medical care.”
In line with the court-supervised proceedings, the company has secured a commitment for $80 million debtor-in-possession financing from the primary lien lenders connected to the RSA. Upon court endorsement, these funds will support the firm’s regular financial commitments and daily operations, ensuring uninterrupted compensation for employees, partners, and vendors.
Presently, Air Methods maintains its regular operations, serving its extensive network of partner hospitals and healthcare institutions across 47 states with its fleet of 365 medical aircrafts from 275 bases. It’s pertinent to note that the company’s subsidiary operations, including United Rotorcraft and Blue Hawaiian – Hawaii’s leading provider of helicopter tours – continue to function normally and are excluded from the ongoing court process.