Status Report: Apria Healthcare - The Blackstone Group

Sep. 14, 2008 2:47 AM ETAHG-OLD, BX

Apria Healthcare (AHG) has filed an amended 10-K (2007), amended 10-Q (Q1 2008) and 10-Q for the second quarter of this year with the SEC.

With respect to the merger transaction and accounting restatement, the current 10-Q states the following:

On August 26, 2008, Apria received a notice of default from the trustee under the indenture governing the senior notes regarding Apria’s failure to deliver its Quarterly Report on Form 10-Q for the period ended June 30, 2008 within the specified time period. Pursuant to the indenture, failure by Apria to comply with such reporting requirements will become an event of default if not remedied within 60 days after the date on which written notice of such failure, requiring Apria to remedy the same, is given to Apria by the trustee, and the senior notes, together with accrued and unpaid interest thereon, shall become due and payable immediately upon notice to the Company from the Trustee or the holders of not less than 25% in aggregate principal amount of the senior notes then outstanding. Upon the filing of this quarterly report on Form 10-Q for the period ended June 30, 2008, the Company will have remedied the default under its senior notes.

As of this entry, The Blackstone Group (BX) has not issued a statement regarding these filings or the transaction in general.

The current, tentative perception is that AHG's restatement is relatively positive or, at least, not catastrophic to the point where Blackstone would be forced to reconsider this transaction. In other words, the rationale for the transaction appears to remain intact, based on the updated accounting. Again, this is a very tentative assessment and until Blackstone responds (or does not respond at all), the outcome of this transaction under the current terms remains tenuous.

Disclosure: We have no positions of any kind, in any security. We are a completely neutral source of research and analysis.

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