Akumin plans pre-packaged Chapter 11 filing following Stonepeak deal

By Sarah Lizee

Olympia, Wash., Oct. 20 – Akumin Inc. and some of its subsidiaries plan to make a pre-packaged Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of Texas, according to a press release issued Friday.

The company has reached an agreement with Stonepeak, an alternative investment firm specializing in infrastructure and real assets, and the company's stakeholders on the terms of a financial restructuring aimed at improving Akumin’s balance sheet and providing ample liquidity.

The contemplated transaction will result in Akumin no longer being publicly listed.

The company hopes to get court approval of the transaction within the next 45 days and complete the transaction after receiving regulatory approvals.

Throughout the process, Akumin's operations are expected to continue as normal.

The company expects to continue to pay trade creditors, employees, and other partners in the ordinary course of business.

The contemplated transaction will result in the existing Stonepeak note, totaling about $470 million, being canceled and converted into common shares of the company.

In addition, Stonepeak will invest $130 million in new money into the company as a capital contribution.

Akumin and Stonepeak have executed a restructuring support agreement with over one-third of the company’s common equity, a supermajority of the company’s bondholders, and all of the company’s revolving lenders.

Other than the notes that are exchanged for cash through a reverse Dutch election opportunity, the company’s senior secured notes due 2025 will be exchanged for new senior secured notes with a maturity of Aug. 1, 2027 and an increased interest rate.

Additionally, the company's senior secured notes due 2028 will be exchanged for new senior secured notes with the same maturity date but an increased interest rate.

As part of the transaction, Akumin's existing common stockholders will receive a total of $25 million in cash as well as contingent value rights (CVRs) for their shares.

In the event Stonepeak provides debtor-in-possession financing or any other new money contributions at or prior to the closing of the transaction, the DIP facilities and new money will convert to equity at closing and reduce the $130 million investment amount on a dollar-for-dollar basis.

Stonepeak will also make $60 million of the proceeds from its investment available for a reverse Dutch election opportunity for the company’s notes due 2025 and the notes due 2028.

Akumin's advisers include Jackson Walker LLP, Dorsey & Whitney LLP and Stikeman Elliott LLP as legal adviser, AlixPartners LLP as financial adviser, and Leerink as investment banker.

Sidley Austin LLP is serving as legal adviser to Stonepeak, and Moelis & Co. is serving as Stonepeak’s investment banker.

Akumin is a Plantation, Fla.-based outpatient diagnostic imaging services provider.

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