Long time Angiotech Pharmaceuticals Inc. shareholders are left with nothing now that British Columbia Supreme Court has sanctioned the troubled biotechnology company’s creditor-approved refinancing plan.
The plan cancels about $250 million in senior subordinated notes and gives affected creditors who hold those notes roughly $250 million in a new kind of Angiotech share. Alternatively, each creditor can opt to receive up to a maximum of $150,000 in cash.
Court sanctioning of the proposal is expected to enable most Angiotech employees to keep their jobs, although the company’s board of directors will be replaced.
Angiotech is under court protection from creditors stemming from the Companies’ Creditors Arrangement Act.
Angiotech announced April 7 that the United States Bankruptcy Court for the District of Delaware has issued an order that gives the B.C. court’s sanction of the restructuring plan full force in the U.S.
The ruling ends what was a roaring success story for the company that had the motto: “Redefining Success.”
In the middle of the last decade it joined QLT Inc. (TSX:QLT) and Aspreva Pharmaceuticals Corp. as B.C.’s only profitable biotechnology companies.
Aspreva was sold for US$915 million to Switzerland’s Galenica Holding SA in 2007.
Poor stock performance forced Nasdaq to delist Angiotech shares in January. (See “Angiotech booted off Nasdaq for lacklustre stock performance” – BIV Daily Edition, January 6, 2011.) The TSX followed suit last month.
BIV reported in November that the firm entered into an agreement to convert much of its debt into shares to avert going into default with its debt holders. (See “Angiotech to convert debt to equity in recapitalization plan” – BIV Daily Edition, November 1, 2010.)