Idorsia sets bondholder meeting for May 6, seeks to extend maturity

By Mary-Katherine Stinson

Lexington, Ky., April 23 – Idorsia Ltd. will hold a bondholder meeting on May 6 to vote on proposals to amend the terms of its outstanding convertible bonds due July 17, 2024 (ISIN: CH0426820350), according to a press release.

The company will seek to change the current bond terms to avoid potential liquidity constraints.

Specifically, the proposals would amend the conversion price to CHF 6 from the current CHF 33.95, extend the maturity date by six months to Jan. 17, 2025 and give Idorsia the option to call the bonds at par, in full or in part, at any time with 10 trading days' notice.

As a consent fee, Idorsia will deliver 5 million company shares to the bondholders once the amendment becomes effective.

The company will also commit to use proceeds from divestitures or outlicensing transactions to repay the bonds under the proposed amended terms.

Idorsia's main investors, Jean-Paul and Martine Clozel, have expressed they will vote in favor of the proposals.

Idorsia has appointed J.P. Morgan Securities plc to act as dealer manager for the bondholder solicitation.

Chief financial officer Andre C. Muller said in the press release, “Based on many interactions with some significant bondholders, we have decided to adjust our initial proposal, by substantially reducing the conversion price to CHF 6, extending the maturity date of the bonds by six months, and introducing a consent fee of 5 million shares. The requested approval of the new terms of the bonds by a majority of two thirds of the bonds’ aggregate principal amount would avoid short-term liquidity constraints and should give the additional time needed to negotiate and close additional collaborations that could significantly extend the cash runway.”

As previously reported, on April 17 the company published its unaudited financial status as of March 31 on its website (http://www.idorsia.com/investors/financial-information). The financials were required for the upcoming bondholder meeting.

A bondholder meeting was initially planned for April 30 before being rescheduled.

The biopharmaceutical company is based in Allschwil, Switzerland.

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