BY Richard Summerfield
Private equity-owned medical helicopter company Air Methods has successfully emerged from Chapter 11 bankruptcy protection with significantly reduced debt and increased liquidity.
The company, headquartered in Englewood, Colorado, was acquired by private equity firm American Securities in 2017. It filed for bankruptcy in late October 2023 with around $2.24bn in debt. Air Methods’ creditors were demanding around $1.3bn in payments, of which the company could only cover around 15 percent.
“Today marks an important inflection point for Air Methods in our transformation journey as we enter our next stage focused on investing in the business and executing on our growth initiatives for the benefit of our healthcare partners, communities, customers, and patients,” said JaeLynn Williams, chief executive of Air Methods. “With a stronger balance sheet and additional financial resources, we remain focused on serving our contractual partners, opening new greenfield bases, optimizing our field operations, expanding our frontline team, and going in-network with commercial insurers. We are well-positioned for long-term success and excited about the opportunities ahead.”
As part of the restructuring process, ownership of the business transitioned to the company’s lenders and noteholders upon emergence, as contemplated by the pre-packaged plan of reorganisation. Some of the new owners are investing approximately $185m of new capital. Air Methods will continue to provide services through its fleet of 365 medical helicopters and fixed-wing aircraft, operating from 275 bases and serving 47 states across the US.
The company aimed to complete its debt restructuring by the end of 2023, according to its court filings, and announced the successful completion its financial restructuring on 28 December. The restructuring saw the company cut around $1.7bn of its debt. In its filing, the company said its business had suffered due to high operating costs, rising interest rates and the enforcement of the US No Surprises Act, which banned surprise bills for out-of-network medical care and made it more difficult for the company to collect payment for services rendered.
Founded in 1980 to provide air transport for patients and urgent supplies, Air Methods’ troubles began after it was taken private by American Securities. Its finances were first sapped by having to increase salaries to attract and keep skilled employees.
News: Air Methods exits bankruptcy with $1.7 billion less debt