Air Methods Overcomes $1.7B Debt in Restructuring Amid Rising Costs

Summary

  • Air Methods, the medical services provider, was able to significantly reduce its debt of $2.24 billion by $1.7 billion through restructuring.
  • The company had been struggling financially due to unfavorable economic conditions, increased labor expenses, and a recent ban on unexpected medical bills in the U.S.
  • As per the terms of the reorganization, lenders and note holders are now in possession of Air Methods.
  • The new owners have also pledged to infuse an additional $185 million into the company’s finances.
  • The formerly independent company was acquired by private equity firm American Securities back in 2017.

Restructuring Slashes Debt

Air Methods reported that it had managed to eliminate about $1.7 billion of its debt burden through a restructuring process. This comes as the company had entered bankruptcy grappling with a debt pile of approximately $2.24 billion.

Rising Costs and Legislation Trouble

The financial health of the company was adversely affected by increasing interest rates and labor costs, compounded by a recently imposed U.S. ban on unexpected medical invoices. These “surprise” bills often arise when patients are unwittingly provided with transportation services or treatment from a provider outside their insurance network, despite attending an in-network medical facility.

Ownership Change and Fresh Investment

According to the reorganization terms, creditors, and noteholders now control Air Methods. Some of these new owners have committed to investing a further $185 million in the company.

Air Ambulance Services

Air Methods delivers medical services via its substantial fleet of 365 medical helicopters and fixed-wing aircraft.

Previous Acquisition

Air Methods became a subsidiary of the private equity firm American Securities in 2017.

The company’s new direction and improved financial position could positively influence its stock performance and potentially affect trading within the healthcare sector.

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