VANCOUVER, Oct. 1 /PRNewswire-FirstCall/ - Angiotech
Pharmaceuticals, Inc. (NASDAQ: ANPI; TSX: ANP) ("Angiotech" or the
"Company") announced today that it has determined, in connection
with discussions being conducted with holders of approximately 72%
of the Company's 7.75% Senior Subordinated Notes (the "Subordinated
Notes"), that it will not make interest payments totaling
approximately $9.7 million due to
holders of the Subordinated Notes on October
1, 2010. The Company is currently in discussions with
holders of its Subordinated Notes to effectuate a transaction that
would materially reduce the Company's existing debt levels.
The transaction, if completed and approved, would provide for
substantial improvement in the Company's credit ratios, liquidity
and operating flexibility. Angiotech expects to announce specific
details relating to the transaction in the very near future. In the
near term, the Company's operating entities remain adequately
supported, with cash on hand in excess of $25 million as of September 24, 2010.
Concurrent with these discussions, the Company has entered into
a Forbearance Agreement with Wells Fargo Capital Finance, LLC
("Wells Fargo"), pursuant to which Wells Fargo has agreed to leave
in place the Company's existing revolving credit facility and not
immediately exercise rights or remedies it may have relating to the
Company's decision to defer the interest payment due to the holders
of the Subordinated Notes.
"We believe concluding these discussions will be a critical step
in advancing Angiotech's primary mission of providing innovative
surface modified medical devices, drug-device combinations and
novel locally delivered therapeutics to our physician customers and
their patients," said Dr. William
Hunter, President and CEO of Angiotech. "We appreciate our
Subordinated Note holders and our lenders at Wells Fargo working
with the Company to facilitate a consensual transaction that allows
our business plan to move forward consistent with our strategic
vision and in partnership with our customers, operations, and
employees."
"To date, we have held substantive and constructive discussions
with the holders of a significant majority of our Subordinated
Notes, who have been supportive of our business plan and are
excited about Angiotech's future prospects," said Thomas Bailey, Chief Financial Officer of
Angiotech. "We expect to complete discussions in the very near
future, and if concluded the transaction is expected to immediately
and substantially improve our financial flexibility and competitive
position."
Mr. Bailey added, "Throughout this transaction process we will
continue to remain focused on providing our customers with quality
products and on-time deliveries, and our employees, suppliers,
partners and trade creditors will continue to receive all amounts
owing to them in the ordinary course of business."
Pursuant to the terms of the Subordinated Notes, Angiotech has a
30 day grace period from the date an interest payment is due in
which to make the required interest payment to the holders of the
Subordinated Notes before the Company is in default of its
obligations. Angiotech intends to utilize the 30 day grace period
to attempt to reach an agreement which Angiotech believes will be
beneficial for all of its stakeholders.
Failure to make the interest payment on the Subordinated Notes
within 30 days of the due date (or such extended grace period as
may be agreed to by the requisite bondholders) would constitute an
event of default under the indenture governing the Subordinated
Notes. Any such event of default would permit holders of 25% or
more of the aggregate outstanding principal amount of such
Subordinated Notes to accelerate obligations under the Subordinated
Notes. Additionally, if the Company fails to make the interest
payment due on the Subordinated Notes prior to the expiration of
any applicable grace period, such failure will also result in an
event of default under the indenture governing the Company's Senior
Floating Rate Notes due 2013.
Under the Company's Credit Agreement with Wells Fargo, the
failure to make interest payments on the Subordinated Notes would
constitute an event of default, which in turn would permit Wells
Fargo to accelerate the Company's obligations thereunder and
terminate any outstanding commitments. As noted, the Company has
entered into a Forbearance Agreement with Wells Fargo, pursuant to
which Wells Fargo has agreed not to take any action under the
Company's Credit Agreement before October
31, 2010 with respect any event of default relating to the
Company's decision to defer interest payments due on October 1, 2010. To date, the Company has no
borrowings outstanding under the Wells Fargo facility. As of
September 24, 2010, the Company had
no advances outstanding and available liquidity of approximately
$15 million under the Credit
Agreement.
As of October 1, 2010, the Company
has not reached an agreement with the holders of the Subordinated
Notes and the Company can give no assurance that an agreement will
be reached. Any recapitalization transaction resulting from the
discussions with the holders of the Subordinated Notes would be
subject to completion of definitive documentation and the
satisfaction of any conditions contained therein.
The discussions between Angiotech and holders of the
Subordinated Notes follow previous announcements that the Company
had retained the Blackstone Group LP to analyze its capital
structure and advise it in its exploration of financial and
strategic alternatives for all or part of its business. Over the
course of the past 24 months, working together with Blackstone and
the Company's legal advisors at Osler, Hoskin & Harcourt LLP and
Willkie Farr & Gallagher LLP,
the Company has undertaken significant initiatives to reduce costs
and manage its liquidity, implemented a senior secured revolving
credit facility with Wells Fargo, and explored a wide range of
potential strategic and financial transactions, with the primary
goals of improving the Company's credit ratios, reducing the
aggregate amount of its indebtedness and securing additional
working capital liquidity to fund the Company's various business
initiatives. In addition, Angiotech and its advisors have explored,
and will continue to explore, opportunities that could capture
strategic value for part or all of the business or that could
enhance the Company's competitive position, or could provide for
sharing of certain of the Company's significant investments in
commercial and research initiatives with a corporate partner or
partners. The Company has said it will provide further updates on
said processes as information warrants.
Forward Looking Statements
Statements contained in this press release that are not based on
historical fact, including without limitation statements containing
the words "believes," "may," "plans," "will," "estimates,"
"continues," "anticipates,"
"intends," "expects" and similar expressions, constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and constitute
"forward-looking information" within the meaning of applicable
Canadian securities laws. All such statements are made pursuant to
the "safe harbor" provisions of applicable securities legislation.
Forward-looking statements may involve, but are not limited to,
comments with respect to our objectives and priorities for the
remainder of 2010 and beyond, our strategies or future actions, our
targets, expectations for our financial condition and the results
of, or outlook for, our operations, research and development and
product and drug development. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors
that may cause the actual results, events or developments to be
materially different from any future results, events or
developments expressed or implied by such forward-looking
statements. Many such known risks, uncertainties and other factors
are taken into account as part of our assumptions underlying these
forward-looking statements and include, among others, the
following: general economic and business conditions in the United States, Canada and the other regions in which we
operate; market demand; technological changes that could impact our
existing products or our ability to develop and commercialize
future products; competition; existing governmental legislation and
regulations and changes in, or the failure to comply with,
governmental legislation and regulations; availability of financial
reimbursement coverage from governmental and third-party payers for
products and related treatments; adverse results or unexpected
delays in pre-clinical and clinical product development processes;
adverse findings related to the safety and/or efficacy of our
products or products sold by our partners; decisions, and the
timing of decisions, made by health regulatory agencies regarding
approval of our technology and products; the requirement for
substantial funding to conduct research and development, to expand
manufacturing and commercialization activities; and any other
factors that may affect our performance. In addition, our business
is subject to certain operating risks that may cause any results
expressed or implied by the forward-looking statements in this
press release to differ materially from our actual results. These
operating risks include: our ability to attract and retain
qualified personnel; our ability to successfully complete
pre-clinical and clinical development of our products; changes in
our business strategy or development plans; our failure to obtain
patent protection for discoveries; loss of patent protection
resulting from third-party challenges to our patents;
commercialization limitations imposed by patents owned or
controlled by third parties; our ability to obtain rights to
technology from licensors; liability for patent claims and other
claims asserted against us; our ability to obtain and enforce
timely patent and other intellectual property protection for our
technology and products; the ability to enter into, and to
maintain, corporate alliances relating to the development and
commercialization of our technology and products; market acceptance
of our technology and products; our ability to successfully
manufacture, market and sell our products; the availability of
capital to finance our activities; our ability to restructure and
to service our debt obligations; and any other factors referenced
in our other filings with the applicable Canadian securities
regulatory authorities or the Securities and Exchange Commission
("SEC"). For a more thorough discussion of the risks associated
with our business, see the "Risk Factors" section in our annual
report for the year ended December 31,
2009 filed with the SEC on Form 10-K, as amended, and our
quarterly report for the 2nd quarter of 2010 filed with the SEC on
Form 10-Q.
Given these uncertainties, assumptions and risk factors,
investors are cautioned not to place undue reliance on such
forward-looking statements. Except as required by law, we disclaim
any obligation to update any such factors or to publicly announce
the result of any revisions to any of the forward-looking
statements contained in this press release to reflect future
results, events or developments.
(C)2010 Angiotech Pharmaceuticals, Inc. All Rights Reserved.
About Angiotech
Angiotech Pharmaceuticals, Inc. is a global specialty
pharmaceutical and medical device company. Angiotech discovers,
develops and markets innovative treatment solutions for diseases or
complications associated with medical device implants, surgical
interventions and acute injury. To find out more about Angiotech
(NASDAQ: ANPI, TSX: ANP), please visit our website at
www.angiotech.com.
SOURCE Angiotech Pharmaceuticals, Inc.
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