Shares of Modivcare Inc. (NASDAQ:MODV) tumbled 40% in premarket trading Thursday after the healthcare services firm revealed it had entered Chapter 11 bankruptcy proceedings.
The announcement came late Wednesday, with the company confirming it had filed for protection under Chapter 11 as part of a plan to restructure its balance sheet.
As part of the reorganization, Modivcare expects to slash its outstanding funded debt by roughly $1.1 billion, significantly reducing its financial burden.
To keep operations running throughout the court process, the company secured $100 million in fresh financing from its lenders.
Modivcare projected that the restructuring will be completed by early in the fourth quarter of 2025, allowing it to emerge from bankruptcy with a more sustainable capital structure.
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