HME manufacturer Invacare Corp. and two of its U.S. subsidiaries have entered voluntary Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.
The two U.S. subsidiaries involved in the Chapter 11 filings are Adaptive Switch Laboratories (ASL) and Freedom Designs, according to a report from HMEB sister magazine Mobility Management. A statement from Invacare said its other businesses throughout the rest of the world are not included in these filings.
The Chapter 11 filings are related to a Restructuring Support Agreement (RSA) Invacare entered with substantially all of its debt holders. The RSA reduces the company’s debt balance by approximately $240 million while it provides a new money investment of roughly $60 million of equity capital to repay certain debt obligations and facilitate Invacare’s transformation plan.
“Having the full support of our secured term loan lender and a majority of our convertible noteholders will enable the prearranged filings to proceed efficiently,” said Geoff Purtill, president and CEO of Invacare. “The company expects to emerge with significantly less debt on its balance sheet and will secure additional liquidity to support long-term growth.”
“Invacare has the right leadership, vision and the financial commitment from the sponsorship group to succeed, and we are confident that this Chapter 11 process will result in a comprehensive recapitalization transaction that will not only stabilize liquidity but also de-lever the balance sheet and better position Invacare for future growth,” said Steven Rosen, CEO of Azurite Management, the largest shareholder of Invacare.