EXTON, Pa., March 24 /PRNewswire/ -- ViroPharma Incorporated (Nasdaq: VPHM) announced it has repurchased, in a privately negotiated transaction, $45 million principal amount or 18 percent of the company's Senior Convertible Notes due March 2017 for total consideration of approximately $21.2 million. Following these repurchases, senior convertible notes representing $205 million of principal debt are outstanding.
As a result of the convertible note repurchase, ViroPharma expects that its fully diluted shares outstanding will be decreased by approximately 2.38 million shares. The company is finalizing the accounting for the resulting net pre-tax gain in accordance with the company's adoption of FASB Staff Position (FSP) No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement). This gain will be reported in the financial statements for the first quarter of 2009. ViroPharma anticipates that the taxable gain arising from the repurchase will qualify for deferral until 2014 in accordance with the provisions of the American Recovery and Reinvestment Act of 2009. The senior convertible note repurchase will reduce the company's interest expense for the balance of fiscal 2009 by approximately $1.6 million. Additionally, the corresponding hedge and warrant (call spread) entered into by ViroPharma in March 2007 was unwound for the bonds repurchased. ViroPharma anticipates that the annual cash savings as a result of this repurchase will be approximately $0.9 million per year.
"A dislocation in the capital markets has allowed us to repurchase some of our outstanding debt at an attractive discount to the principal amount of the notes and reduce our fully diluted shares outstanding," commented Charles Rowland, ViroPharma's vice president and chief financial o
|SOURCE ViroPharma Incorporated|
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