KKR & Co.’s Envision Healthcare Inc. is in discussions with lenders about including them in a follow-up transaction to a debt exchange that stripped their collateral rights to a roughly $2.5 billion corporate asset, WSJ Pro Bankruptcy reported. Envision and its advisers are speaking with lenders that were left out of the debt exchange last month, saw the value of their holdings plummet as a result and may now be interested in tendering their loans for new debt, likely at a discount to face value. The discussions come after the company shifted its ambulatory services unit AmSurg Corp. out of the reach of term lenders owed roughly $3.5 billion and used the asset to secure $2.6 billion in new loans. Envision and KKR declined to comment. The company is now exploring another deal covering the left-out lenders that could swap their holdings for new debt backed once again by AmSurg on a first- or second-lien basis, people familiar with the matter said. Envision also could issue new debt at the core subsidiary where the original loans currently sit. Last month’s debt deal, led by outside investors Centerbridge Partners LP and Angelo Gordon & Co., helped Envision cut down debt and raise cash to weather business headwinds. Other private-equity-backed companies have engineered similar deals in recent years to free up collateral for new investment. Some have been challenged in court, though most have ended in negotiated settlements.
