NU Online News Service, Jan. 6, 2004, 1:02 p.m. EST – Magellan Health Services Inc., Columbia, Md., a company that administers mental health care for one-quarter of all U.S. residents, emerged from Chapter 11 bankruptcy reorganization Monday.[@@]
The U.S. Bankruptcy Court in New York approved Magellan’s reorganization plan in October 2003, but the plan officially took effect Jan. 5.
The restructuring has reduced Magellan’s debt by about $600 million and added $150 million in new equity capital. The stock of the reorganized company now trades on the Nasdaq Stock Market under the symbol MGLN.
Magellan sought bankruptcy court protection in March 2003 because it had trouble covering payments on debt it accumulated in the 1990s.
“With our debt concerns behind us, we can completely focus management’s time and energy on our business and providing a platform for growth and enhanced service,” Steven Schulman, Magellan’s chief executive, says in a statement about the reorganization.
Deutsche Bank A.G., Frankfurt, organized a group of lenders that has supplied a $100 million term loan, an $80 million letter of credit and a $50 million revolving credit facility.
Onex Corp., Toronto, a Canadian buyout company, says it has organized a private equity fund, Onex Partners L.P., that has invested $101 million in the new Magellan in exchange for a 24% ownership interest.
“Onex has control of Magellan and is expected to itself be a 25% limited partner in Onex Partners,” Onex says.