Valeant gets extra month from lenders to file annual report

April 7, 2016 10:22 AM

Valeant Pharmaceuticals International Inc said on Thursday its lenders had agreed to give it an extra month to file its annual report, providing further reassurance to investors as the company attempts to win back their confidence.

The extensions provide relief if Valeant is unable to file its annual report by April 29 - a deadline the company reiterated that it intended to meet.

The Canadian company said last week that it had asked its lenders for another month to file the report, seeking to reduce the risk of a default on its $30 billion debt if it missed the April 29 deadline.

Valeant, whose U.S. shares were up about 8 percent in premarket trading, said its lenders had agreed to a May 31 deadline to lodge the report.

"The company is comfortable with its current liquidity position and cash flow generation for the rest of the year, and remains well positioned to meet its obligations," Valeant said, repeating a statement it made last week.

The amendment to the company's credit agreement also allows it to extend the filing deadline for its first-quarter report to July 31 from June 14.

The deal with its lenders requires Valeant to apply substantially all net asset sale proceeds to prepay its term loans. The agreement also waives the cross-default to indentures that arose when the annual report was not filed on the original due date of March 15.

The Laval, Quebec-based company said in February it would not meet the March 15 deadline because of a review of its accounting practices by a board committee.

Valeant said on Tuesday that the committee, which was probing the company's ties to specialty drug distributor Philidor, had completed its review and had not found anything that would require additional restatements.

Up to Wednesday's U.S. close, Valeant's stock had risen almost 30 percent in two days, helped by that news as well as a comment by key shareholder and board member William Ackman that a new chief executive could be appointed within weeks.

The company said last month that CEO Michael Pearson would step down as soon as a replacement was found.

Fueled by acquisitions, Valeant grew at a frantic pace under Pearson and became a Wall Street favorite as it delivered double-digit profit growth.

However, the Valeant story began to unravel late last year as its aggressive acquisition strategy and practice of sharply raising drug prices come under intense public, political and regulatory scrutiny.

The company's shares, which hit a record high of $263.81 in August, were trading at $36.90 before the opening bell.

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