Long-time Angiotech Pharmaceuticals Inc. shareholders will be left with nothing, if the British Columbia Supreme Court upholds a creditor-approved refinancing plan today (April 6).
That plan would cancel about $250 million in senior subordinated notes and give affected creditors who hold those notes roughly $250 million in a new kind of Angiotech share.
Alternatively, each creditor could opt to receive up to a maximum of $150,000 in cash.
Court sanctioning of the plan would render existing Angiotech shares worthless.
The upshot of the proposal is that most Angiotech employees would be able to keep their jobs, although the company’s board of directors will be replaced.
Angiotech is under court protection from creditors stemming from the Companies’ Creditors Arrangement Act.
The situation is a sad end to what was a roaring success story for a company whose motto was: “Redefining Success.”
In the middle of the last decade it joined QLT Inc. (TSX:QLT) and Aspreva Pharmaceuticals Corp. as B.C.’s only profitable biotechnology companies.
Aspreva was sold for US$915 million in cash to Switzerland’s Galenica Holding SA in 2007.
Poor stock performance forced Nasdaq to delist Angiotech shares in January. (See “Angiotech booted off Nasdaq for lacklustre stock performance” – BIV Daily Edition, January 6, 2011.) The TSX followed suit last month.
BIV reported in November that the firm entered into an agreement to convert much of its debt into shares to avert going into default with its debt holders. (See “Angiotech to convert debt to equity in recapitalization plan” – BIV Daily Edition, November 1, 2010.)