Air Methods emerges from bankruptcy, slashes debt by $1.7 billion

By Sarah Lizee

Olympia, Wash., Dec. 28 – Air Methods Corp. has emerged from Chapter 11 bankruptcy, according to a press release issued Thursday afternoon.

The company’s pre-packaged Chapter 11 plan was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas on Dec. 6, as previously reported.

As background, the company entered into a restructuring support agreement with most of its first-lien lenders and bondholders and its equity sponsor, American Securities, LLC.

As a result of the restructuring process, Air Methods reduced its total debt by about $1.7 billion. Ownership of the business transitioned to the company’s lenders and noteholders upon emergence, as contemplated by the plan.

The company lined up a $250 million backstopped five-year exit facility from members of the informal lender group. The facility consists of $175 million in term loans and $75 million of converted debtor-in-possession term loans.

The facility bears interest at SOFR plus 900 basis points per annum, payable in cash.

Other priority claims, other secured claims, prepetition securitization program claims, SICFA claims, prepetition aircraft financing claims, general unsecured claims, intercompany claims and intercompany interests were unimpaired by the plan.

Holders of prepetition secured loan claims were expected to receive a 16% recovery via their pro rata share of an equity distribution and rights offering subscription rights. Holders had the option to elect an equity cash-out option.

Holders of prepetition unsecured note claims were expected to receive a recovery of 1% via their pro rata share of a recovery pool and warrants. These holders could also elect an equity cash-out option.

The Denver-based air medical service provider filed Chapter 11 bankruptcy on Oct. 24 under case number 23-90886.

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