NU Online News Service, Sept. 4, 3:05 p.m. – PlanVista Corp., Tampa, Fla., a company that rents preferred provider networks to retail managed care carriers, says it has failed to make an interest payment due on $4 million it borrowed from CENTRA Benefit Services Inc., Dallas, in 1998.
The company, which recently changed its name from HealthPlan Services Inc., also says a credit facility it has been using to finance its operations expired Aug. 31. PlanVista reported in a quarterly financial statement filed with the U.S. Securities and Exchange Commission that it owes about $65 million on the credit facility.
First Union Corp., Charlotte, N.C., led a group of 10 large banks that provided the credit facility. The group most recently restructured the credit facility in March.
A copy of the amended credit agreement is available in a HealthPlan Services Inc. filing on the SEC Web site, at http://www.sec.gov/Archives/edgar/data/942319/000095010901500689/dex1012d.txt
PlanVista is in discussions with CENTRA about the CENTRA notes, and it has already reached an “agreement in principle” with First Union and the other lenders in charge of the credit facility that should give it until Dec. 15 to refinance or restructure the credit facility, PlanVista says.
PlanVisita is also trying to raise cash by selling stock or notes, and it is considering the possibility of selling all or part of the company, the company says.
Several other managed care companies have also reported problems this year with refinancing credit facilities.
PlanVista was one of the biggest sources of TPA services and provider network rentals in the United States, but it ran up debt because of problems with operations, acquisitions and a dot-com investment.
The company attacked its debt problems June 18 by selling HealthPlan Services, a third-party administration and managing general agent underwriting unit that accounted for about 88% of the company’s revenue, to the managers of the unit.
PlanVista still carries substantial debt, and the company as a whole reported $4 million in net losses for the second quarter on $6.7 million in revenue, down from a $2 million net loss on $8.9 million in revenue for the second quarter of 2000.
But the operations PlanVista still owns generated $12 million in earnings before interest, taxes, depreciation and amortization for the 12 months that ended June 30 on $32 million in revenue, the company says.
That compares with EBITDA earnings of $17 million on $262 million in revenue when figures for HealthPlan Services are included, the company says.