Gamida Cell makes Chapter 15 bankruptcy filing, set to go private

By Sarah Lizee

Olympia, Wash., April 22 – Gamida Cell Ltd. filed Chapter 15 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware to gain recognition of its proceedings in Israel, according to court documents.

The company’s capital structure includes $75 million of 5.875% convertible senior notes due in 2026 and $25 million 7½% exchangeable first-lien secured notes due 2024 with holders Highbridge Tactical Credit Master Fund, LP, Highbridge Tactical Credit Institutional Fund, Ltd. and Highbridge Convertible Dislocation Fund, LP.

In March, in light of the debtor’s rapidly dwindling liquidity, the noteholders sent the debtor a letter in which they offered to take the debtor private through conversion of their existing debt claims into 100% shares of the debtor.

The debtor and its board elected to move forward with the proposal after concluding it was the only option available to prevent a liquidation proceeding under the Israeli insolvency law and the wind-down of the debtor.

On March 26, the consenting creditors and the company entered into a restructuring support agreement and an accompanying term sheet under which the consenting creditors agreed to convert $75 million of their unsecured debt into 100% of shares of the debtor, following which all existing equity rights will be canceled.

The debtor expects that its shares will be delisted from Nasdaq in the coming weeks.

Under the RSA, the parties further agreed that Highbridge will provide funds to the debtor through a new senior secured credit facility, which is comprised of $30 million of senior secured term loan; 100% of the outstanding secured debt obligations owed to Highbridge by the debtor, equal to about $4.4 million plus accrued interest, fees and expenses; and up to $15 million of additional commitments, to be funded by way of delayed-draw term loans.

General unsecured creditors, other than Highbridge, will be paid in the ordinary course and remain unimpaired.

Existing stockholders will have the right to future cash payments in the form of conditional value rights totaling up to $27.5 million contingent on the debtor’s achievement of certain milestones in the coming years.

The debtor and Highbridge will provide broad mutual releases for and on behalf of their directors and officers and other affiliates.

The debtor’s board may terminate the RSA to pursue an alternative proposal.

Gamida Cell, located in Jerusalem, develops cell therapy products for the treatment of debilitating and fatal diseases. The Chapter 15 case number is 24-10847.

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