BY Richard Summerfield
X-ray and medical imaging company Carestream Health has announced that it has voluntarily filed for reorganisation under Chapter 11 of the US Bankruptcy Code in the Bankruptcy Court for the District of Delaware.
The company, founded by Eastman Kodak Co, filed for bankruptcy protection with a lender-backed proposal which would cut its debt by $470m. Under the terms of the proposal, there will be a total debt reduction of $250m more than the company’s previously announced recapitalisation agreement. This process will significantly strengthen Carestream’s balance sheet and position the company for continued success.
“We are commencing the final stage of our recapitalization process, which will significantly enhance our ability to navigate a dynamic market,” said David C. Westgate, chairman, president and chief executive of Carestream. “Since announcing our recapitalization process in April, our lenders have remained overwhelmingly supportive, and we have worked constructively with them to complete the transaction. As our talks evolved, we determined the best course of action was to implement the agreement through an expedited court-supervised process.
“With a clear path to completion, we expect to emerge from this process as a stronger partner to our customers, with significantly reduced debt and new owners who also continue to believe in the future of Carestream. Carestream has strong market opportunities ahead. I am confident in the strength of our core business and our ability to maintain market leadership moving forward,” he added.
According to a statement announcing the filing, Carestream expects to continue operating normally throughout the court-supervised process and remains focused on serving its customers and working with suppliers on normal terms. Carestream expects to move through the Chapter 11 process on an expedited basis and complete the recapitalisation in approximately 35-45 days.
Carestream has secured an $80m debtor-in-possession financing facility from some of its existing lenders to reinforce its liquidity and fund the costs of the Chapter 11 process. Carestream entities outside the US are not part of the Chapter 11 process and will continue operating as normal.
News: Medical imaging company Carestream Health files Chapter 11 bankruptcy