Invacare Corp. (NYSE: IVC) and two of its US subsidiaries have filed for bankruptcy amid expected refinancing efforts. Struggling medical device manufacturers Net debt is 65%.
The Eryria-based company, once revered as an innovator of medical devices used in non-acute and home care, and made a name for itself with products such as power wheelchairs, is still undergoing a U.S. Section 11 proceeding. Global manufacturing and delivery of products should continue uninterrupted, he said. The reason for this is that “other businesses in the rest of the world continue to perform well.”
A related lawsuit was filed in the US Bankruptcy Court for the Southern District of Texas on Tuesday, January 31.
Invacare said it has secured $70 million in debtor-in-charge (DIP) financing to provide “stability and liquidity” during the restructuring process pursuant to a restructuring assistance agreement.
In a statement provided, Invacare President and CEO Geoff Purtill, succeeding former CEO Matthew Monaghan, said: Removal from the company last spring — describing the move as a “major step forward” for the business.
“The company expects a significant reduction in balance sheet debt, providing additional liquidity to support long-term growth,” Partill said, noting that “global demand is strong.” Stated.
Steven Rosen, CEO of Ohio investment firm Azurite Management, will begin acquiring a devalued stake in Invacare in 2022 and is now the largest shareholder with over 10% ownership. It will not only stabilize liquidity, but also deleverage the balance sheet and position Invacare better for future growth. ”
“Invacare is an important company globally and to Northeast Ohio, and today’s actions will allow us to continue to serve our customers while protecting our business values,” said Rosen. added. “We look forward to continuing our engagement with the company and completing the transformation of our business. “
It is worth noting that Invacare has already signed a restructuring assistance agreement. Because of the high costs associated with Section 11 bankruptcy and confirming recovery plans, asset sales are more common in small business Section 11 lawsuits, says Mark Marklin, bankruptcy attorney at Braus McDowell. says Mr.
In a larger and more complex Chapter 11, as in the case of Invacare, restructuring is much more feasible given its ability to incur the high costs of litigation.
“Here they seem to be doing a real reorganization,” Merklin said.
He noted that the bankruptcy proceedings could take anywhere from six months to several years to resolve, depending on how negotiations with the company’s major creditors play out.
As Reported by MarketWatch, shares of Invacare, which is currently stalled amid news of bankruptcy, closed at 66 cents on Tuesday, Jan. 31. last 12 months.