This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Rotech Healthcare Reaches Agreement In Principle With Its Major Debtholders On Debt Reduction And Restructuring

Rotech Healthcare Inc. (OTCBB: ROHI.OB) announced today that the Company and Consenting Holders holding in the aggregate a majority of the outstanding principal amount of Rotech’s 10.5% Senior Second Lien Notes have reached an agreement in principle to restructure and recapitalize the Company’s capital structure. The Company believes the agreement in principle presents an effective means to eliminate substantial secured legacy debt, which has burdened the Company for more than a decade.

Under the agreement in principle with the Consenting Noteholders, Rotech expects to complete the restructuring and recapitalization of its capital structure through a pre-arranged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. Rotech anticipates filing its consensual plan and petitions in the coming weeks. Because of the agreement in principle, the entire process is expected to be completed within 90 to 120 days after commencement.

Under the contemplated debt restructuring:

  • The holders of the $23.5 million Term Loan would be paid in full;
  • The $230 million of 10.75% First Lien Notes would be amended and the maturity potentially extended;
  • The $290 million in 10.5% Second Lien Notes would be converted into 100% of the common equity of the reorganized Company, thereby eliminating this tranche of secured debt;
  • All of the Company’s outstanding shares would receive a distribution of 10 cents per share (provided that the total amount paid on account of such interests does not exceed $2.62 million) and then be cancelled; and
  • Trade creditors and vendors would be paid in full in the ordinary course of business as long as they maintain or reinstate existing payment terms.

“After careful planning and consideration, we are pleased to have reached this major milestone of substantially reducing our debt,” said Steven P. Alsene, President and Chief Executive Officer. “The Company has struggled for years under the debt burden placed on it when it was spun off from its former parent company in 2002. Since that time, dramatic reimbursement reductions have made it essential that we reduce our debt to a manageable level. With this debt reduction, we believe we will be able to further take advantage of our inherent strengths to grow the Company, both organically and through carefully selected acquisitions.”

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,965.74 +53.63 0.32%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs