raise a sizable amount of gross proceeds in the form of convertible
securities that will bear non-cash interest payable in kind, and will
be convertible into shares of Angiotech's newly formed subsidiary,
API. The net proceeds that the Company elects to raise will be
utilized to reduce selected principal amounts of the two cash pay
debt securities of Angiotech currently outstanding, significantly
reducing Angiotech's cash interest expense and thereby improving
interest coverage and debt ratios.
- Retain majority API stake for Angiotech shareholders. This
transaction leaves a pro forma API initial ownership stake of between
52% and 68% for Angiotech's existing shareholders (measured
accounting for the convertible notes on an "if converted" basis at
closing). Importantly, Angiotech's existing shareholders will
continue to participate meaningfully in the success of the various
API businesses and product opportunities, including API's proprietary
Quill SRS(TM) technology and its recently approved
5-flourouracil-eluting central venous catheter.
- Mitigates risks related to Angiotech's drug-eluting stent royalty
revenue and cash flows. The debt and cash interest expense reduction
that may be achieved, combined with the significant implied equity
value of Angiotech's ownership stake in API, should improve
Angiotech's ability to continue to meet its debt obligations should
royalties received from its partner Boston Scientific Corporation
("BSC") decline from current levels as a result of additional
competitive entrants into the market for drug-eluting stents.
- Unlock and capture value embedded in Angiotech's non-TAXUS assets.
The conversion ratio of the securities issued impl
|SOURCE Angiotech Pharmaceuticals, Inc.|
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