Alere tweaks waiver request under three series, doubles consent fee

By Susanna Moon

Chicago, May 5 – Alere Inc. said it modified the consent solicitations for its 6½% senior subordinated notes due 2020, 6 3/8% senior subordinated notes due 2023 and 7¼% senior notes due 2018.

Alere has doubled the consent payment to $5.00 for each $1,000 principal amount, pushed up the requested waiver dates and added a third waiver date, according to a company notice.

As announced April 29 the company is soliciting consents to extend the deadline for filing financial information and to waive any default under the note terms for failure to timely file with the Securities and Exchange Commission or to submit to trustees the company’s 10-K form for the fiscal year ended Dec. 31 and subsequent 10-Q filings.

Under the amended terms, Alere is seeking waivers until 5 p.m. ET on May 31 as the initial waiver date, until 5 p.m. ET on July 15 as the extended waiver date and until 5 p.m. ET on Aug. 31, the third waiver date if uncured before the modified extended waiver date, the company said on Thursday.

As a condition to the third waivers becoming effective, the company said it will provide by the extended waiver date in an interim supplement

• An update on material developments for the company’s previously announced analysis of aspects of the timing of revenue recognition, more specifically, revenue cutoff, in Africa and China for the years ended Dec. 31, 2013, 2014 and 2015;

• Estimated ranges of revenue and EBITDA for the fiscal year ended Dec. 31, 2015 and the quarterly period ended March 31; and

• Cash and cash equivalents (excluding restricted cash) and total debt (short-term debt plus long-term debt), as of Dec. 31, 2015 and March 31.

Originally, the company had asked holders to waive defaults until 5 p.m. ET on Aug. 18, the initial waiver date, and until 5 p.m. ET on Nov. 16, the extended waiver date if uncured before the initial waiver deadline.

If the company fails to file the annual report or to obtain a waiver under the consent solicitation by May 20, an event of default would occur under the two series of subordinated notes and noteholders would have the right to accelerate the payment upon notice from the trustee or holders of 25% of the notes, the company originally said.

The consent solicitations will continue until 5 p.m. ET on May 9. Holders must be of record as of 5 p.m. ET on April 28.

Holders who deliver consents will receive a cash payment of $5.00, up from $2.50, for each $1,000 principal amount. When the solicitation was announced, the company said that if any default or event of default remained uncured before the initial waiver date, it would pay an additional amount of $5.00 for each $1,000 of notes.

The company said it expects to cure any defaults for the failures to file before the initial waiver date.

The consent payments for each series only will be made if the company receives the needed consents under the solicitation.

To obtain the waivers, the company must secure consents from holders of a majority of the outstanding notes of that series.

J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811/212 270-0844) is the solicitation agent. D.F. King & Co., Inc. (Peter Aymar, 800 283-2170 or 212 269-5550) is the information and tabulation agent.

As previously announced, the company was unable to file its 2015 annual report by March 15, the extension period, because it is carrying out an analysis of the timing of revenue recognition in Africa and China for the years ended Dec. 31, 2013, 2014 and 2015.

The company said it will be unable to file its annual report for 2015 until this analysis is completed.

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As announced April 28, Alere reached an agreement on April 22 with its lenders to waive defaults for failure to file financial statements.

Alere also said at the time that it expected to seek consents from noteholders for an extension and waiver.

The company said at the time that it had received a notice of default from the trustee for its 6½% notes and 6 3/8% notes but not for the 7¼% notes.

From the time the notice is received, the company has 60 days to cure the default, which would give it until May 20 in the case of the 6½% notes and 6 3/8% notes.

Alere is a Waltham, Mass.-based provider of near-patient diagnosis, monitoring and health management.

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