BELLUS Health Reports Results for Third Quarter of Fiscal 2008 and on E...(25 2008 the restructuring planannounced ...),Health

Date:11/10/2008

25, 2008, the restructuring plan announced by the Pan-Canadian Investors Committee (the Committee) in December 2007 was approved by the ABCP holders and is expected to be completed shortly, resulting in the conversion of the ABCP into longer term financial instruments. As at September 30, 2008, the Company estimated the fair value of these ABCP at approximately $9,716,000, of which $546,000 is presented as part of Restricted Cash, as it is pledged to a bank as collateral for letters of credit issued in connection with lease agreements. In connection with its fair value estimations, the Company recorded a write-down of $1,184,000 for the year ended December 31, 2007, and an additional write-down of $375,000 during the quarter ended March 31, 2008, to recognize impairment losses related to these investments. During the current quarter, no additional write-down was recorded; although there were certain changes in factors and assumptions, the net result did not affect the fair value estimation. The Company estimated the fair value of the ABCP using a probability weighted discounted cash flow approach, based on its best estimates of the period over which the assets are going to generate cash flows ranging from five to 28 years based on the proposed restructuring, the coupon interest rate, the discount rate to apply to the net cash flows anticipated to be received commensurate with the return on comparably rated notes in accordance with the risk factors of the different investments and other qualitative factors. This estimate of the fair value of the ABCP is not supported by observable market prices or rates, therefore is subject to uncertainty, including, but not limited to, the successful implementation of the restructuring plan being considered, the estimated amounts to be recovered, the yield of the substitute financial instruments and the timing of future cash flows. The resolution of these uncertainties could be such that the ultimate fair value of these investment
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SOURCE BELLUS Health Inc. Copyright©2008 PR Newswire. All rights reserved

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