Concordia seeks debt restructuring in court; shares fall
Shares of Concordia International (CXR.TO) plunged as much as 35 per cent after the embattled drugmaker announced it will undertake a debt restructuring which may substantially dilute existing shareholders.
Concordia is seeking to reduce its debt obligations by US$2 billion, and as a result of the restructuring will not make US$62.5 million worth of planned payments.
In a release, the company said it had US$340 million worth of cash on hand as of the end of September, sufficient to fund its near-term operations.
The company accrued its massive US$3.7 billion debt load through a series of aggressive acquisitions, including the 2015 acquisition of Amdipharm Mercury for US$3.5 billion. The deal has been the source of many headaches for Concordia, leaving it saddled with Amdipharm’s US$1.4 billion debt load and increasing its exposure to the eventual Brexit fallout.
The company has also been facing regulatory scrutiny in the U.K., where the competition authority is probing whether it illegally drove up prices.
Concordia shares traded for more than $100 apiece as recently as August of 2015.