Nashville, June 27 - Impax Laboratories Inc. sold $75 million of seven-year convertible notes at par with a 3.5% coupon with an initial conversion price set at 130% of the average closing price of its common stock during the 10 trading days beginning and including June 20.
The transaction, with Highbridge International, was negotiated without a placement agent, Impax Labs chief financial officer Arthur Koch Jr. told Prospect News.
Impax Labs said proceeds from the Section 4(2) deal, along with cash on hand, will be used to redeem its 1.25% convertible notes due 2024, plus pay interest.
The Hayward, Calif.-based biotech firm said it had received a demand to accelerate payment on the 1.25% notes from a holder representing more than one-quarter of the $95 million issue. The company also noted that it had $78 million of cash as of May 31.
The acceleration was possible due to a technical default with respect to the convertibles as a result of the company failing to file its 2004 annual 10-K report at the Securities and Exchange Commission within specified time frames. That also resulted in a default under the company's credit facility with Wachovia Bank, which has been waived by Wachovia.
Under the indenture of the new issue, Impax Labs must register the 3.50% debentures and related shares within 60 days of filing the 2004 10-K or within 270 days of closing and have the registration statement declared effective within 90 days of filing or within 360 days of closing.
Terms of the new deal are:
| Issuer: | Impax Laboratories Inc.
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| Issue: | Convertible senior subordinated debentures
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| Placement agents: | None used
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| Amount: | $75 million
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| Maturity: | June 15, 2012
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| Coupon: | 3.5%
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| Price: | Par, $1,000
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| Conversion price: | 130% of average stock price for 10 trading days from June 20
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| Call: | Non-callable
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| Put: | June 25, 2009 at par
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| Pricing date: | June 26
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| Closing date: | June 27
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| Distribution: | Section 4(2)
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| Stock price: | $15.49 at close, June 24
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