One of the nation's largest emergency services providers said Sunday that it filed for Chapter 11 bankruptcy.
Rural/Metro Corp. made the announcement after reaching a deal with its lenders to cut its debt by about half. The move to file bankruptcy was part of that deal.
Rural/Metro said as part of the agreement, it will receive a cash infusion of $135 million from its lenders.
The company noted that its capital structure was created "under different economic circumstances, and making interest payments on the debt while at the same time investing in operations was more than the company's earnings could support."
The company provides services in 21 states including Arizona in Maricopa, Pinal, Pima, and Yuma Counties.
During this restructuring process, Rural/Metro CEO Scott Bartos says emergency services will continue to be "business as usual."
"This agreement is good news for Rural/Metro and for the clients and communities we serve. We have a solution that keeps our operations moving forward while cutting our debt in half," Bartos said.
Rural/Metro is based in Scottsdale and expects to complete its restructuring by the end of the year. It plans to renegotiate unprofitable contracts and free up capital to invest in its business.
Private equity firm Warburg Pincus bought Rural/Metro in 2011 for about $438 million.
Copyright 2013 CBS5 (KPHO BroadcastingCorporation). All rights reserved. The Associated Press contributed to thisreport.
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