HealthSouth Corp. continued to move forward in the company’s attempt to put its accounting scandal behind it.
The company announced Tuesday that it hammered out a deal with creditors holding $1.9 billion of its debt, enabling it to avoid bankruptcy.
The restructuring will cost HealthSouth between $73 million and $80 million, the company said. With this deal, HealthSouth has completed consent solicitations on all $2.6 billion of its public debt.
To get holders of its paper to agree to the pact, HealthSouth had to more than double the premium it is paying in the exchange, according to Bloomberg.
According to the deal, HealthSouth will pay $30, $32.50, and $45 per $1,000 principal amount of senior notes, depending upon the specific paper. The company had at first offered a premium of $13.75 per $1,000 in notes. While some bondholders had accepted that offer, most didn’t, according to the wire service.
In a March court filing, HealthSouth reported that some bondholders claimed they were entitled to premiums of $100 million to $200 million and wanted to force accelerated payments on the debt, Bloomberg noted.
Last week, HealthSouth said a special audit review committee, assisted by the Balch & Bingham LLP law firm and PricewaterhouseCoopers LLP concluded that the fraud and inappropriate accounting at the company were consistent with the company’s previous estimates.