Cell Therapeutics to exchange up to $89.2 million of convertibles in modified Dutch auction

By Susanna Moon

Chicago, May 11 - Cell Therapeutics, Inc. said its board of directors authorized a modified Dutch auction tender offer to exchange its common shares and cash for up to $89.2 million principal amount of five series of convertible notes.

Notes eligible for tender are the company's 4% convertible senior subordinated notes due 2010, 5.75% convertible senior notes due 2011, 6.75% convertible senior notes due 2010, 7.5% convertible senior notes due 2011 and 9% convertible senior notes due 2012.

Cell Therapeutics said it expects to pay $250 to $300 per $1,000 of the notes.

There is about $118.9 million of notes outstanding.

The company expects to use up to $17.8 million of cash on hand and proceeds from a private placement of stock and warrants to a single institutional investor for the cash portion of the exchange.

The company said it believes reducing its debt is necessary in order for its business to operate in light of its current asset base and revenue prospects.

Cell Therapeutics said in a press release that it expects to begin the exchange offer in the near future.

Cell Therapeutics is a Seattle-based biopharmaceutical company developing treatments for cancer.

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