Invacare Files For Chapter 11, But Expects To Continue Focusing On Home-Care Products

Invacare Corporation IVC entered into a “Restructuring Support Agreement” (RSA) with substantially all its debt holders.
It includes its term loan lender, all holders of convertible senior secured notes, and holders of most convertible senior unsecured notes.
The RSA transactions include a reduction of Invacare’s funded debt by approximately $240 million.
It also includes a backstop for a rights offering to holders of claims, providing Invacare with $60 million in equity capital, allowing the company to repay certain debt obligations and facilitate its transformation plan.
Additionally, to effectuate these transactions, Invacare and two U.S.-based subsidiaries commenced voluntary Chapter 11 cases.
The company said its other businesses “remain strong” and excluded from these filings.
Invacare believes the filings won’t impact its ability to manufacture and deliver products to customers globally.
Upon emergence from Chapter 11, Invacare expects to be financially positioned to seize opportunities and capitalize on a significant upward shift in market demand.
The company intends to deliver improved profitability and free cash flow in 2023 and beyond.
Invacare reported interim Q4 revenues of $181 million, +6% Y/Y, with growth in all regions and all major product categories.
Gross margins improved by 310 basis points to 26.6%.
Price Action: IVC shares are down 19.7% at $0.53 on the last check Wednesday.