Medical imaging company Carestream Health files for Chapter 11 bankruptcy

A photo of a $100 bill on August 2, 2011. REUTERS/Yuriko Nakao

(Reuters) – X-ray and medical imaging company Carestream Health Inc filed for bankruptcy protection on Tuesday in a deal to cut $470 million in debt.

The Rochester, New York-based company said its debt levels are unsustainable given long-term headwinds in the medical imaging industry. Court papers Filed in bankruptcy court in Wilmington, Delaware.

In the year Carestream, which has $1.1 billion in revenue and $1.03 billion in debt by 2021, said it plans to seek expedited approval. Restructuring plan This will reduce the debt by 470 million dollars. A majority of the company’s creditors have agreed to support the restructuring, which would transfer the company’s equity to creditors and pay all junior creditors, Carestream reported.

Carestream said in its court filing that its annual revenue was down $100 million from 2018 levels as customers opted for digital-only medical imaging systems that were less profitable for the company than print products.

Carestream’s medical film and printing products, including printer systems, laser imaging films and dental film, will account for approximately 44% of the company’s revenue in 2021, according to court filings. Carestream holds a 37% market share for global medical film products, the company said.

Affluent markets, in particular, are pulling back from print products, which now account for just 4 percent of the company’s medical film sales, Carestream said.

As with the Chinese government’s recent volume-based procurement of healthcare services, the company has struggled in emerging markets due to government cost-cutting efforts.

Carestream tried to find a buyer for the business in 2021, but none of the offers outweighed the company’s $1 billion debt burden, according to the court filing.

Carestream was part of Eastman Kodak Co. before being bought by Onex Corp. for $2.35 billion in 2007. It has 3,410 employees and serves medical clients in more than 130 countries, according to the court filing.

Carestream is seeking bankruptcy court approval to restructure on Sept. 28.

The case is In re Carestream Health Inc, No. 22-10778, in the U.S. Bankruptcy Court for the District of Delaware.

For Carestream: Timothy Kearns and Laura Davis Jones of Pachulski Stang Ziehl & Jones

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