(Reuters) – Cano Health filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware late on Sunday and said it entered into a restructuring support agreement to reduce debt and solicit potential offers, including the sale of the firm.
Shares of the Miami-based company fell more than 50% before the bell.
The primary care provider said it has received a commitment for $150 million in new debtor-in-possession financing from some of its existing lenders, which is expected to provide sufficient liquidity to support its ongoing operations.
Under the Restructuring Support Agreement (RSA), Cano Health said it can convert nearly $1 billion in secured debt into a combination of new debt and full equity ownership in the reorganized entity. Further, the agreement permits exploration of partnerships and potential offers, including the sale of the company or all its assets, Cano said.
The company expects to achieve about $290 million of annualized cost reductions by the end of 2024 and to emerge from the restructuring process in the second quarter of 2024.
Cano Health listed estimated assets and liabilities in the range of $1 billion to $10 billion, according to the court filing.
The company had flagged doubts about its ability to continue as a going concern last year and said it would lower costs by reducing 17% of its workforce.
(Reporting by Akanksha Khushi and Christy Santhosh in Bengaluru; Editing by Mrigank Dhaniwala and Dhanya Ann Thoppil)
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