Invacare Corp. has announced it’s started voluntary Chapter 11 cases in United States Bankruptcy Court as part of its financial restructuring plan.
In a Feb. 1 news announcement, the manufacturer added that “two of its U.S.-based subsidiaries” — Adaptive Switch Laboratories (ASL) and Freedom Designs — were also involved in the Chapter 11 filings.
“Invacare’s other businesses throughout the rest of the world remain strong and are not included in these filings,” the company said. Invacare said the refinancing plan would reduce its net debt by about 65 percent, while global product manufacturing and delivery are not expected to be interrupted.
Invacare CEO/President Geoff Purtill said in the press release, “The actions announced today mark a big step forward for Invacare. 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. The company expects to emerge with significantly less debt on its balance sheet and will secure additional liquidity to support long-term growth.
“Global demand is strong, and by increasing our financial flexibility, we will be able to focus on continuing to design, manufacture and distribute products that help Make Life’s Experiences Possible. We have a clear vision for the future, and we are working expeditiously towards our goals.”
Steven Rosen, CEO of Azurite Management, Invacare’s largest shareholder, added in the announcement, “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.”
Invacare noted “a significant upward shift in market demand” and said the actions described in the announcement would better position the company “to seize opportunities.”
The manufacturer expects to continue to pay employee wages and benefits, and to support customer programs and product warranties as Chapter 11 actions proceed. “The company expects operations to continue and to pay its suppliers in the ordinary course of business for all authorized goods delivered and services rendered after the filing date,” the announcement said.
Invacare said its businesses “throughout the rest of the world remain strong” and are not included in the Chapter 11 filings.
