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A Warburg Pincus venture approaches bankruptcy

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August 1
1:00 AM 2013

Sources close to Rural/Metro, the country's biggest private ambulance service operating in rural communities, said that the company is considering a possible bankruptcy filing. For the private equity owned Rural/Metro Corp, the situation remains to be controlable. There is a possiblity in which the Scottsdale, Arizona firm could avoid the bankruptcy protection filing, the sources said. Several investors hold large portions of the company's debt, making it easier for Rural/Metro to negotiate with creditors to rework its financial obligations with out filing for bankruptcy.

The private ambulance service provider has been struggling with a substantial debt load from a leveraged buyout in 2011 and weak revenue gains from its ambulance trips. On July 15, the firm had missed a US$15.6 million interest payment. The delinquent sets off a one month grace period for the firm to negotiate before the loan is considered in default.

"Operations are continuing as normal and we remain committed to meeting the needs of our customers, patients and communities. Our top priority-as always-is to ensure that Rural/Metro's talented emergency services professionals continue their lifesaving work," Rural/Metro noted.

Warburg Pincus LLC bought the national firefighting-service and ambulance operator in 2011. According to Moody's Investors Service, Warburg Pincus initially infused US$213 million of its own capital into the company and paying for the remaining with a US$515 million debt.

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