Santhera Pharmaceuticals begins exchange offer for 5% convertibles

Chicago, March 25 – Santhera Pharmaceuticals Holding AG launched an exchange offer for its CHF 60 million 5% convertible bonds due 2022 (ISIN: CH0353955195), according to a press release.

The company seeks to exchange all of the bonds in circulation.

At a meeting on March 8, the company sought to amend the terms of the bonds. At that meeting, the company failed to get the required threshold of two-thirds of all bonds outstanding to amend the terms, even though a large majority of bondholders at the meeting voted in favor of the amendments.

The company is offering for each bond with a nominal value of CHF 5,000 26 shares of Santhera and one new 7.5% convertible bond due Aug. 17, 2024 with a nominal value of CHF 3,375 and a significantly reduced conversion price, to be issued by the company and to be listed on the SIX Swiss Exchange.

Highbridge Tactical Credit Master Fund, LP, holder of 32% of the bonds in circulation, will accept the exchange offer.

The company believes that the restructuring of the convertibles is needed to enable it to raise additional financing and therefore crucial to keep the company as a going concern until after it has received such financing.

The exchanged convertibles would have a conversion price per share of 115% of the lower of CHF 4.80 or the daily VWAP of one share for the five trading days preceding the settlement of the exchange offer and not less than CHF 2.50.

The maturity date would be pushed to Aug. 17, 2024 from Feb. 17, 2022.

The interest on the notes would be increased to 7.5% from 5%, newly payable in cash or at the option of the company in shares at a 10% discount to the then-prevailing market price of the shares.

There would be a make-whole payment for early redemption, whereas there is no make-whole redemption currently.

For the right to redeem the bonds, the conversion price would be 150% on the new notes versus 160% previously.

The company must exchange at least 50% of the bonds for the exchange offer to happen.

Additional consents are being sought at a bondholders’ meeting that require a two-thirds majority.

Should the company receive the necessary consents, the original bond restructuring would be pursued and the exchange offer would be terminated.

The exchange offer period starts on April 6 and ends at noon ET on April 19.

An additional acceptance period will start April 21 and end at noon ET on April 27 if the first offer is successful.

Settlement is planned for May 4.

Stifel Nicolaus Europe Ltd. is the financial adviser to the company.

Santhera is a Liestal, Switzerland-based pharmaceutical company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.