Modivcare enters comprehensive restructuring agreement to reduce debt and inject capital.

Modivcare has entered into a comprehensive restructuring agreement to strengthen its future, reduce debt, and inject capital. The agreement includes a commitment for $100 million in new investment and supermajority support from secured lenders. The restructuring is expected to have no impact on clients, members, employees, or transportation providers, and operations will continue uninterrupted. The move aims to improve Modivcare's financial foundation and support future growth.

Modivcare Inc. (Nasdaq: MODV), a technology-enabled healthcare services company, has taken significant steps to bolster its financial position by entering into a comprehensive restructuring agreement. The agreement aims to reduce debt, inject capital, and support future growth while ensuring continuity of operations for clients, members, employees, and transportation providers.

The restructuring, which includes a supermajority support from secured lenders, was announced on August 20, 2025. The agreement involves a commitment for $100 million in new investment to support ongoing operations and future growth. More than 90% of First Lien Lenders and over 70% of Second Lien Lenders have entered into a Restructuring Support Agreement (RSA) with Modivcare, committing to provide $100 million in debtor-in-possession (DIP) financing. This liquidity will be used to finance the restructuring process and support operations during the expedited bankruptcy process [1].

The restructuring is expected to reduce Modivcare’s total outstanding funded debt obligations by approximately $1.1 billion, which is more than 85% of its outstanding funded debt obligations. This reduction is anticipated to significantly lower the Company’s annual cash interest payments. The transaction also involves a transition of ownership to a group of seasoned and well-funded investors committed to Modivcare’s success [1].

Modivcare’s Chief Executive Officer and President, Heath Sampson, stated, “Modivcare sits at the center of the preventive healthcare ecosystem. This recapitalization strengthens our balance sheet and allows Modivcare to accelerate our investment in innovation by combining technology and data with high-touch member engagement. As the connector to care, our seamlessly connected platform improves access, quality, and cost for payors, providers, and facilities, while positioning us to lead the future of coordinated care” [1].

All of Modivcare’s service lines, including non-emergency medical transportation, personal care services, and remote patient monitoring, will continue to operate in the ordinary course, with no expected interruption or change in access to care. The company expects to close this transaction quickly, exiting the restructuring process early in the fourth quarter of 2025 [1].

Modivcare remains committed to providing excellent service to its clients and their members. The Company has filed customary motions that, once approved, will allow Modivcare to meet obligations to clients and critical vendors, including transportation providers, and pay employee wages and benefits as usual [1].

For more information about Modivcare’s Chapter 11 case, including claims information, please visit veritaglobal.net/Modivcare or contact Verita, the Company’s noticing and claims agent, at +1 (888) 733-1521 for U.S. and Canada or +1 (310) 751-2636 for international [1].

References:
[1] https://www.businesswire.com/news/home/20250820661662/en/Modivcare-Enters-into-Comprehensive-Restructuring-Agreement-to-Strengthen-its-Future-Reduce-Debt-and-Inject-Capital