Air Methods files for Chapter 11 bankruptcy

US-based air ambulance provider Air Methods has initiated Voluntary Prepackaged Chapter 11 bankruptcy proceedings as part of plans to restructure its business operations.

The Chapter 11 proceedings were started by Air Methods after it entered a Restructuring Support Agreement (RSA) with its key stakeholders.

The purpose of the RSA, and the terms contained within it, is to ‘reduce the company’s total debt by approximately $1.7 billion, increase liquidity, and position the business for long-term success by allowing it to focus on its growth and development strategies’.

In connection with the court-supervised processes, Air Methods has obtained ‘commitments for $80 million of debtor-in-possession financing from the first lien lenders party to the RSA’, which it says will provide it with ‘sufficient liquidity to support the company’s financial obligations and day-to-day operations during this process’.

This will allow vendors and suppliers to continue being paid in full, and Air Methods employees to continue receiving pay and benefits without interruption. The company has confirmed that the services it operates will continue to run normally throughout the process.

‘Meaningful progress’ has already been made

Air Methods stated that it ‘expects to complete this process on an expedited basis, and emerge with an optimal capital structure’ by the end of the year.

“We are pleased to have reached this agreement with our key stakeholders, which will enable Air Methods to continue supporting patients with lifesaving care and serving as an integral link between the nation’s top healthcare facilities and people in rural and remote communities,” said JaeLynn Williams, CEO of Air Methods. “By strengthening our balance sheet, we are taking an important step forward in delivering on our transformation plan while answering every call with the highest level of service and patient care.”

She added that ‘over the past year’, the company had made ‘meaningful progress optimizing our field operations, going in-network with leading commercial insurers and improving cost structure’. Furthermore, the company has seen ‘record numbers of transports’, and has opened several new bases across the US in response to the ‘great demand for air medical services’.

Skyryse is currently working with Air Methods to certify its flight operating system for the Airbus H130.