GenesisCare files bankruptcy with plans to separate U.S. business

By Sarah Lizee

Olympia, Wash., June 1 – GenesisCare Pty Ltd. and 52 of its affiliates have filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas to implement a restructuring, according to a press release.

As part of the business transformation, GenesisCare intends to explore a separation of its U.S. business from its businesses in Australia, Spain and the United Kingdom, creating two platforms.

This will enable each of the businesses to grow and operate sustainably and continue to deliver high-quality patient care while maximizing value for all stakeholders, the company said.

GenesisCare said in court documents it currently has less than $8 million in available liquidity.

Prior to filing the petition, the company submitted a request to draw down on the remaining A$120.5 million of commitments under its revolving credit facilities. However, some of the revolving lenders declined to fund about A$76 million of commitments, leaving the debtors with a significant liquidity shortfall, the company said.

The company said that, given their quickly deteriorating liquidity position, the debtors were forced to quickly pivot to solicit proposals for debtor-in-possession financing.

GenesisCare has secured commitments for a $200 million new-money DIP facility from existing term lenders. The facility will also include a $600 million rollup of prepetition term loan debt.

The company is seeking interim access to $90 million of the new money and $270 million of the rollup.

GenesisCare said the facility is essential for the debtors to continue to operate their businesses during the Chapter 11 cases.

The lenders have also agreed to let the company use cash collateral through the process.

GenesisCare has filed customary first-day motions with the court to ensure that patient care continues on an uninterrupted basis.

All doctors and employees will continue to receive their pay and benefits, and suppliers of goods and services outside of the United States will be paid in the ordinary course. U.S. vendor payments will be subject to the Chapter 11 process and court approval.

The company is hoping to file a Chapter 11 plan within 75 days and emerge from bankruptcy within 225 days.

In its petition, the company listed 50,000 to 100,000 creditors, $1 billion to $10 billion in assets and $1 billion to $10 billion in liabilities.

GenesisCare is majority owned by Kohlberg Kravis Roberts & Co. LP and China Resources Capital.

The company is being advised by PJT Partners as investment banker, Alvarez & Marsal as restructuring adviser, and Kirkland & Ellis LLP, Herbert Smith Freehills LLP and Jackson Walker LLP as legal counsel.

GenesisCare is a cancer care provider with headquarters in Sydney. The Chapter 11 case number is 23-90614.

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