As the ongoing COVID-19 outbreak adversely impacted much of the global economy, organizations worldwide have been going through tough ride. Consequently, this has increased worries about a bigger wave of bankruptcies beyond travel and aviation businesses that have sought to restructure through the US procedure named ‘Chapter 11’.
It has been reported that recently, Endologix Inc., the U.S-based company developing cutting-edge treatments for aortic disorders, has opted for the Chapter 11 case to address the financial conditions resulting from COVID-19 related challenges. The company has also filled a consensual plan for reorganization supported by its largest creditor, Deerfield Partners.
According to sources familiar with the knowledge of matter, Endologix will become a privately operated firm and emerge to be financially stable to realize the full potential of its cutting edge pipeline of abdominal aortic aneurysm (AAA) in the industry.
The company will reduce around USD 180 million of debt from its balance sheet on a net basis, including around USD 130 million of debt presently held by Deerfield which will convert to equity in the newly formed company.
Speaking on which, John Onopchenko, CEO of Endologix said that the company is excited to commence a new chapter for the organization which would facilitate financial stability. Although the COVID-19 situation is responsible for several delays in AAA procedures that, in turn, have negatively impacted revenue, the company has taken the right steps to ensure it is providing patients and customers with the quality products and most talented employees in the industry, Mr. Onopchenko states.
Mr. Onopchenko added that this procedure would help the company to strengthen its balance sheet and the shift to private ownership would allow it to accelerate its progress with its strong patient focus, innovation, and an unrelenting commitment to advancing its life-saving products aided by industry-leading evidences.