pSivida lowers conversion price on $15 million in 8% convertible debentures

By Sheri Kasprzak

New York, July 17 - pSivida Ltd. has reduced the conversion price on its 8% convertible debentures due 2008.

The $15 million in debentures are held by Castlerigg Master Investments, and the conversion price will now be $2.00, cut from $7.10. If the company's market price drops below $2.00 on April 30, 2007, the conversion price will be reset again.

The holder now has the option to have up to $6.25 million in principal of the notes redeemed on July 31, 2007 and Jan. 31, 2008.

For the amendments to the note, Castlerigg received warrants equal to 5.7 million American Depositary Shares, exercisable at $1.80 each for five years.

pSivida will prepay $2.5 million in existing debt before the end of the term of these notes with a $3.5 million payment.

The notes were issued on Oct. 6, 2005.

Based in Perth, Western Australia, pSivida makes nanotechnology products used by pharmaceutical and other medical providers.

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