NEW YORK, Feb. 23, 2007 (PRIME NEWSWIRE) -- Aveta Inc., a leader in Medicare Advantage with over 220,000 members, released today an update on its financial plans.
The Company has announced that in light of the Company's financial results, it is retaining financial advisors to assist it in taking steps to strengthen its financial position. Actions under consideration include a restructuring of its existing bank loan agreement and the infusion of additional capital, including by way of a rights offering that would allow the participation of existing security holders. In this regard, the Company has already begun discussions with its lenders regarding a possible covenant restructuring. The appropriate amount and structure for any additional capital is undetermined at this time.
The founders and original shareholders of the Company, including Daniel E. Straus, Angelo, Gordon & Co. and Redwood Master Fund, Ltd., have indicated to the Company their willingness to support the Company's efforts to improve its financial position and to participate in a capital infusion.
"Although we are extremely disappointed by our current financial results we remain optimistic about the prospects of the Company for the future. We look forward to working with our lenders, investors and management to take the steps necessary to assure our members, providers, lenders and investors that the Company remains on solid financial ground," said Daniel E. Straus, Chairman and Chief Executive Officer of Aveta. "We have made significant changes to our management team and have begun to implement a revised business plan and strategy in Puerto Rico including new medical management programs to address healthcare costs while continuing to provide high quality medical care to all of our beneficiaries. There will be no changes to existing benefits in 2007," concluded Mr. Straus.
About Aveta
Caring for over 220,000 Medicare beneficiaries, Aveta is one of the largest for-profit companies focusing on Medicare Advantage and a leader in addressing the unique healthcare needs of the chronically ill., Aveta is headquartered in Fort Lee, New Jersey and currently has operating subsidiaries in Southern California, Puerto Rico, and Illinois.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security nor shall any offer, solicitation or sale be deemed to be made by the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Special note regarding forward looking statements:
The matters disclosed in the foregoing release include, and oral statements made from time to time by representatives of the Company may include, forward-looking statements that represent the Company's current expectations of the future. Any such statements are subject to risks and uncertainties that could cause actual outcomes to differ materially from these expectations. These forward-looking statements include statements relating to the outcome of any negotiations with the Company's lenders and potential sources of capital and to the Company's anticipated financial performance and business prospects. These forward-looking statements are necessarily estimates reflecting the best judgment of senior management and involve a number of risks and uncertainties, some of which may be beyond our control, that could cause actual results to differ materially from those suggested by the forward-looking statements. Such factors include, without limitation, the Company's ability to successfully negotiate the terms of any agreement with its lenders and other sources of capital and its ability to implement its revised business plan and improve the operating performance of its business, membership enrollment and dis-enrollment patterns; changes in utilization; changes in medical and prescription drug cost trends; the Company's ability to accurately estimate and calculate Part D risk corridor adjustments; CMS retroactive risk adjustments to Medicare rates; marketing expenses related to limited open enrollment; increasing competition and potential confusion in the marketplace regarding other MA, MA-PD, PDP, and PFFS plan offerings; the Company's ability to accurately estimate incurred but not reported medical claims; contractual disputes with providers; increases in costs or liabilities associated with litigation; legislative and regulatory actions or changes; costs associated with information and data systems conversions and compliance with regulatory mandates; recent management changes; and changes in tax estimates, assets, or liabilities and valuation allowances related thereto. These forward-looking statements speak only as of the date stated and the Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized.