Invacare disclosure statement approved; plan hearing April 28

By Sarah Lizee

Olympia, Wash., March 31 – Invacare Corp. received approval of the disclosure statement for its Chapter 11 plan, according to an order filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan hearing is scheduled for April 28.

As previously reported, Invacare has entered into a restructuring support agreement with substantially all its debtholders, including term loan lender Highbridge Capital Management LLC, all of the holders of convertible senior secured notes, and holders of a majority of its convertible senior unsecured notes.

The company’s current capital structure includes about $358.16 million in total funded debt, consisting of a $5.81 million secured revolver due 2026, a $90.5 million secured term loan due 2026, $41.48 million of 5.68% convertible senior secured notes due 2026, $72.91 million of 5% series 1 convertibles notes due 2024, $77.76 million of 5% series 2 convertible notes due 2024 and $69.7 million of 4.25% convertible notes due 2026.

The restructuring transactions contemplate reducing the company’s funded debt by about $240 million.

The agreement includes a backstop for a rights offering to holders of claims on account of the company’s unsecured notes and holders of general unsecured claims, providing the company with $60 million of equity capital to repay some of its debt and facilitate its transformation plan.

The company has a commitment from funds managed by Highbridge for an up to $85 million four-year senior secured first-lien term loan facility.

The exit term loan will bear interest at SOFR plus 800 basis points, with a 2% floor.

Invacare also has a commitment for up to $41.5 million of 7.5% five-year senior first-lien secured convertible notes.

The exit convertibles will have a strike price per share that results in conversion being exercisable at a total enterprise value of about $285 million.

Capacity for additional exit financing will be available to the company in the form of two revolvers with combined availability of up to $70 million.

Creditor treatment

The restructuring support agreement contemplates DIP claims and administrative claims being paid in full in cash.

Priority tax claims will be paid in full.

Lenders of the term loan facility will receive their pro rata share of the exit term loan.

Holders of secured notes will receive their pro rata share of exit secured convertible notes.

Holders of unsecured notes will receive the opportunity to participate in the rights offering (including the preferred exchange) on a pro rata basis with other holders of unsecured notes and general unsecured claims, and to the extent a holder has any residual unsecured notes claim, their pro rata share of 100% of the new common equity (subject to dilution by the exit convertible notes, the new preferred equity, the backstop equity premium and the management incentive plan).

Holders of general unsecured claims will receive the opportunity to participate in the rights offering (including the preferred exchange) on a pro rata basis with other holders of unsecured notes and general unsecured claims, and to the extent a holder has any residual general unsecured claim, their pro rata share of 100% of the new common equity (subject to dilution by the exit convertible notes, the new preferred equity, the backstop equity premium and the management incentive plan); or other treatment mutually agreed to, including the option to elect to be paid in cash.

Intercompany claims will receive no distribution.

Intercompany interests will be reinstated, distributed, contributed, set off, settled, canceled and released, or otherwise addressed.

All existing interests will be canceled without any distribution.

Section 510(b) claims will be discharged with no distribution.

Invacare is an Elyria, Ohio-based medical equipment manufacturer. The company filed bankruptcy on Jan. 31 under Chapter 11 case number 23-90068.

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