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COURT CONFIRMS RURAL/METRO PLAN OF REORGANIZATION
FOR IMMEDIATE RELEASE
Dec. 17, 2013
Andrew Siegel / Dan Moore
Joele Frank, Wilkinson Brimmer Katcher
Financial Indebtedness to Be Reduced by Approximately 50 Percent
$135 Million in New Capital Will Support $40 Million Planned Investments, Including New Equipment for East Tennessee
Rural/Metro Corporation, a national provider of private ambulance and fire protection services based in Scottsdale, Ariz., today announced that the U.S. Bankruptcy Court for the District of Delaware (“the Court”) has confirmed the company’s Plan of Reorganization. Rural/Metro expects to formally emerge from Chapter 11 in the next few weeks.
“The Court’s confirmation of our plan is a major milestone for Rural/Metro, and we look forward to completing our financial restructuring and emerging as a stronger and more competitive company,” said Scott A. Bartos, president and chief executive officer of Rural/Metro. “We will emerge with 50 percent less debt, greater capital flexibility and the resources to continue investing in patient care. I want to express my gratitude to our business partners and valued employees for their patience and support throughout this process, and I look forward to an exciting and prosperous future.”
Mr. Bartos continued, “Rural/Metro has become an operationally healthy and efficient company. We have aligned our operations and positioned ourselves for growth by investing in what matters most – caring for our patients and communities. We are enhancing our infrastructure and technology that support our state-of-the-art medical transportation and fire services. This transaction completes our formal restructuring process and cements our ability to provide long-term stability to the markets and customers we serve.”
Throughout the process, local operations in 21 states and nearly 700 communities have been unaffected by the corporate restructuring. Rural/Metro of East Tennessee Regional Director Jerry Harnish reports that Knox County ambulances have been experiencing some of the highest county contract compliance rates, and it has been business as usual across its service areas in Knox, Blount, Loudon, Polk and Franklin counties.
“Rural/Metro is dedicated to providing the highest-level pre-hospital care to the residents that we serve, and this new chapter for our company will allow us to continue that commitment to clinical excellence,” Harnish said.
Over a 12-month period, Rural/Metro will invest $40 million in capital enhancements to add more than 70 new ambulances, six fire trucks and equipment, including cardiac monitors and stretchers, to operations across the country, as well as develop new billing and accounting systems.
Rural/Metro recently added seven new state-of-the-art ambulances to its 54-ambulance fleet in Knox County, representing a $910,000 investment in updating Knox County’s emergency system. The ambulances will replace and upgrade several ambulances that are scheduled to be retired this year. An eighth ambulance has been ordered and will arrive in a few weeks, bringing that total investment to more than $1 million.
“Residents here in East Tennessee can expect to see new equipment and vehicles in their areas over the 12 months,” Harnish said. “Our reorganization is great news for our company and great news for the communities we serve, as we invest in capital enhancements across our service areas.”
Under the terms of the plan, Rural/Metro’s bondholders will provide the company with a new equity capital infusion of $135 million to help position the company for renewed growth.
“In early November, we reorganized our operational model to better support our frontline caregivers and meet the demands of today’s healthcare environment,” Mr. Bartos added. “Additionally, we introduced several exciting initiatives, including our Care3 program, to further our pursuit to become an employer of choice and a leading care provider across all areas of our business.”
Court filings and other documents concerning the restructuring process are available at www.donlinrecano.com/rmc. Interested parties can also contact Rural/Metro’s claims agent, Donlin, Recano & Company, Inc. directly by calling Rural/Metro’s restructuring hotline at 212-771-1128.
Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor, LLP are serving as legal counsel, Lazard Frères & Co. L.L.C. is serving as investment banker, and Alvarez & Marsal and FTI Consulting, Inc. are serving as financial advisors to Rural/Metro.
Rural/Metro Corporation is a leading national provider of 911-emergency and non-emergency interfacility ambulance services and private fire protection services, operating in 21 states and nearly 700 communities. For more information, visit www.ruralmetro.com.