State Approves Safeguard Reorganization

The California Department of Insurance approved Safeguard Health Enterprises Inc.’s pending recapitalization and change of control, the Aliso Viejo company said Thursday.

Safeguard had agreed in March to an $8-million cash infusion from an investor group, which will convert the debt into shares. The company said the transaction is essential to its financial health.

After the conversion, lenders John Hancock Life Insurance Co. and Silicon Valley Bank will hold a 63% stake in the company. Safeguard said it expects to be debt-free and have virtually no interest expense.

Safeguard provides managed care dental plans, PPO/indemnity dental plans, vision benefit plans and preferred provider organization services.

The company’s stock, which trades over-the-counter, closed at 67 cents, up 9 cents a share.