Alliance HealthCare Services, Inc. (NYSE:AIQ) (the “Company” or “Alliance”), a leading national provider of outpatient diagnostic imaging and radiation therapy services, announced that it expects to reach an agreement with lenders for a 2 nd amendment to its Credit Agreement dated December 1, 2009 by end of business today.
Larry C. Buckelew, Chairman of the Board and Interim Chief Executive Officer stated, “Proactively addressing our debt obligation is a top priority, and our operational discipline and strong cash generation will provide us with the financial flexibility to pay down our term loans and renegotiate our covenants on more attractive terms. We are pleased to report that we expect to reach an agreement by end of business today to amend our Credit Agreement, including a reduction of the term loan by $75 million and expansion of our total leverage covenant.”
Buckelew continued, “We believe that this potential 12% reduction in our term loan and renegotiation of our total leverage covenant will be important proof points highlighting the momentum the Company has generated on its path to long-term growth and profitability. The increased financial flexibility this deal would provide will clearly enhance our financial profile and augment our ability to execute our growth strategy and drive shareholder value.”
The amendment, if approved, will modify the financial covenants to provide Alliance with greater flexibility. Under the proposed amended Credit Agreement, Alliance will be required to maintain (i) a maximum ratio of consolidated total debt to consolidated Adjusted EBITDA less minority interest expense of 5.00 to 1.00 through September 30, 2014, 4.75 to 1.00 from October 1, 2014 through September 30, 2015, 4.50 to 1.00 from October 1, 2015 through December 31, 2015 and 4.25 to 1.00 thereafter. The minimum ratio of consolidated Adjusted EBITDA less minority interest expense to consolidated interest expense will remain unchanged.
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