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Alpharma to exchange further $70 million of convertibles for stock
New York, March 21 -Alpharma Inc. said it has entered into agreements to exchange a further $70 million of its convertible subordinated notes for stock - although the company indicated the latest exchanges will likely be the last. Alpharma will issue 4.4 million of its class A common stock to the noteholders.
Covered by the exchanges are both Alpharma's 4% convertibles and its 5¾% convertibles.
The transactions will result in a non-cash charge to pre-tax income in the first quarter of $33 million. Closing is expected on March 22.
The agreements are the most recent in a series of exchanges by the Fort Lee, N.J. specialty pharmaceutical company.
On March 14, Alpharma announced it would issue 2.3 million shares of its class A stock for $40 million of its 5¾% convertible subordinated notes.
And in December, it issued 1.48 million shares in exchange for $34.134 million of its convertibles.
"Since our acquisition of Faulding's oral pharmaceutical business in early December 2001, we have made great progress in our efforts to reduce debt," said Ingrid Wiik, president and chief executive officer of Alpharma, in a news release.
"Through a combination of aggressive cash management and equity issuances in exchange for convertible debt, we have reduced debt levels over $200 million or 17% since the acquisition. Following the exchanges announced today, Alpharma's debt level will be approximately $950 million, compared to shareholder equity of approximately $1.1 billion. We believe these debt levels presently provide us with adequate flexibility under the covenants of our bank credit agreement and we currently do not contemplate any further debt conversions."
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