NU Online News Service, Jan. 28, 11:58 a.m. – PacifiCare Health Systems Inc., Santa Ana, Calif., says its lenders have given it the flexibility it needs to carry out a $60 million restructuring plan.
The lenders will waive a requirement that could have forced PacifiCare to hire a financial consultant, and ignore the restructuring charge when deciding whether the managed care company has met their financial performance goals, PacifiCare says.
Bank of America Corp., Charlotte, N.C., leads a syndicate of lenders that supply PacifiCare with $150 million in revolving credit and a $650 million term loan. The lenders have a right to step in if PacifiCare does poorly.
The proposed restructuring plan should increase profits in the long run, but it will probably force PacifiCare to record a loss for the fourth quarter of 2001, the company says.
PacifiCare could have met the syndicate agreement performance requirements even if the lenders included the restructuring charge, but getting approval from the lenders and a waiver of the financial consultant requirement seemed desirable, PacifiCare says.