NU Online News Service, Jan. 23, 1:33 p.m. – PlanVista Corp., Tampa, Fla., has agreed to cut its debt load by negotiating a deal that uses control of the company as collateral.
PlanVista, a company that rents provider networks to health plans, says it will use common stock to pay off $5 million in debt, and convertible preferred stock to pay off $29 million in bank debt.
The preferred shares will pay a 10% annual dividend for the first year after the deal closing, and the equivalent of a 12% annual dividend for the next six months.
The banks that hold the preferred stock will also get three seats on the seven-seat PlanVista board.
If PlanVista misses quarterly performance benchmarks, defaults on its remaining debt payments, or fails to redeem the preferred stock within 18 months, the holders of the preferred stock will get four seats on the PlanVista board and the right to acquire 51% of the stock of the company at a price of about $1.80 per share, PlanVista says.
PlanVista shares have been selling for more than $4 each since early October, according to Commodity Systems Inc., Boca Raton, Fla.
PlanVista says it has also negotiated a deal to replace a revolving credit facility that expired Aug. 31, 2001.
