A picture illustration shows U.S. 100 dollar bank notes August 2, 2011. REUTERS/Yuriko Nakao

(Reuters) - Carestream Health Inc, an X-ray and medical imaging company, filed for bankruptcy protection on Tuesday with an agreement in place to cut $470 million in debt.

The Rochester, New York-based company said that its debt level was not sustainable in light of long-term headwinds in the medical imaging industry, in court papers filed in Wilmington, Delaware bankruptcy court.

Carestream, which reported $1.1 billion in revenue in 2021 and had $1.03 billion in debt, said it intends to seek quick approval of a restructuring plan that would reduce its debt by $470 million. Most of the company's lenders have already agreed to support the restructuring, which would hand the company's equity over to lenders and pay junior creditors in full, according to Carestream.

Carestream said in its court filings that its annual revenue has declined by $100 million from 2018 levels due to its customers' preference for digital-only medical imaging systems, which are less profitable for the company than its print products.

Carestream's medical film and printing products, including printer systems, laser imaging films and dental film, accounted for approximately 44% of the company’s revenue in 2021, according to court filings. Carestream holds a 37% market share for global medical film products, according to the company.

Developed markets, in particular, are turning away from print products, and now account for just 4% of the company's medical film sales, Carestream said.

The company also faces difficulty in emerging markets due to government cost-cutting efforts, like the Chinese government's recent turn toward volume-based procurement of healthcare imaging services.

Carestream tried to find a buyer for its business in 2021, but none of the offers were higher than the company's $1 billion debt load, according to its court filings.

Carestream was a part of Eastman Kodak Co before it was acquired by Onex Corp for $2.35 billion in 2007. It has 3,410 employees and it serves medical customers in more than 130 countries, according to its court filings.

Carestream intends to seek bankruptcy court approval of its restructuring on Sept. 28.

The case is In re Carestream Health Inc, U.S. Bankruptcy Court for the District of Delaware, No. 22-10778.

For Carestream: Timothy Cairns and Laura Davis Jones of Pachulski Stang Ziehl & Jones

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