01 Jun 2023
GenesisCare Files for Voluntary Reorganisation to Advance Business Transformation
SYDNEY, June 1, 2023 - GenesisCare (or the "Company"), a leading integrated cancer care provider in the United States, Australia, Spain, and the United Kingdom, announced a comprehensive transformation process intended to position the business for long-term growth. To implement the restructuring, GenesisCare and certain of its affiliates have filed voluntary petitions for reorganisation under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas (the "Court"). During the restructuring, the Company intends to operate in the ordinary course without disruption to patient care.
GenesisCare has secured commitments, subject to Court approval, for a debtor-in-possession (DIP) financing facility providing US$200 million (A$300 million) in new money from existing lenders to support its business operations. This facility will allow GenesisCare to continue meeting its obligations across the entire enterprise―including to patients, doctors, employees, hospital and health service partners and suppliers―while financially restructuring and reorganising the business.
As part of the business transformation, GenesisCare intends to explore separation of its U.S. business from its businesses in Australia, Spain, and the UK, creating two platforms. This will enable each of the businesses to grow and operate sustainably and continue to deliver high-quality patient care while maximising value for all stakeholders. The Company has filed certain 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 U.S. will be paid in the ordinary course. U.S. vendor payments will be subject to the Chapter 11 process and Court approval.
"GenesisCare plays a critical role for the patients, doctors and communities it serves," said David Young, the recently appointed Chief Executive Officer of GenesisCare. "However, the past three years have presented significant operational and financial challenges, requiring a comprehensive restructuring of the operations and balance sheet of the company. We are grateful for the demonstration of confidence in our doctors and our underlying business, represented by the commitment of substantial new financing from the lender group."
"As part of the restructuring process, we are refocusing our business on the national markets we serve, enabling investment in key growth areas and equipment, and simplifying the organisation to deliver better life outcomes for patients, while improving our operational and financial performance. Delivering high-quality patient care and supporting doctors and clinical teams are my key priorities throughout this process and beyond."
Momentum in National Markets
"In Australia, we have year-over-year growth in treatment volumes and strong earnings forecast for FY 2024. Nearly four in 10 radiotherapy patients nationwide are treated by GenesisCare, which equates to more than 30,000 patients each year."
"We will continue to invest in improvements to our business and in the patient experience, including the completion of committed new sites and a ramp-up of our medical oncology investments in Australia," said Richard Lizzio, Executive Manager, Oncology Australia.
In the UK, the business also has strong growth momentum, with market share gains in the core businesses of radiation oncology and medical oncology expected to increase 2024 revenue to more than double that of 2019. In Spain, the company has opened a new state-of-the-art campus in Madrid, which will contribute to driving growth.
In the U.S., the Company is making progress on its turnaround strategy.
"GenesisCare's U.S. business has strong potential, with outstanding physicians, valuable relationships with payers, high patient satisfaction, and a desirable footprint in the U.S.," said Dr. Shaden Marzouk, President of GenesisCare U.S. "We are in the midst of executing a turnaround strategy in the U.S., and the Chapter 11 process and DIP financing will provide the necessary capital and runway to continue to drive that process while we engage with potential third-party strategic or financial partners for the long term. Our current efforts, which are already beginning to yield results, include maximising the value of the business by improving revenue cycle management, enhancing our payer contracting process, and upgrading legacy IT systems to improve operational efficiency and reducing corporate overhead."
GenesisCare is being advised by PJT Partners as investment banker, Alvarez & Marsal, as restructuring advisor, and Kirkland & Ellis LLP, Herbert Smith Freehills LLP and Jackson Walker LLP as legal counsel.
Court filings and information about the Chapter 11 Cases are available on a separate website (https://restructuring.ra.kroll.com/GenesisCare) administered by GenesisCare's claims agent, Kroll. Information is also available by calling +1 (833) 744-6948 (U.S./Canada Toll-Free), +61 (2) 99254385 (Australia), +44 (20) 45198440 (UK) and +1 (646) 440-4836 (International).