Offering with U.S. Healthcare consists of loan carrying 16.5% coupon
By Devika Patel
Knoxville, Tenn., Nov. 17 - K-V Pharmaceutical Co. completed a $60 million term loan with U.S. Healthcare I, LLC and U.S. Healthcare II, LLC on Nov. 17, according to an 8-K filed Wednesday with the Securities and Exchange Commission.
The financing includes an immediate funding of $60 million under a credit agreement. The lenders have also committed to lend up to $120 million in additional funding through a term loan conditional upon certain milestones, $60 million of which will be used to repay the initial $60 million loan under the credit agreement and $20 million that may be drawn upon FDA approval of Gestiva.
The initial $60 million loan pays a 16.5% coupon, 11.5% of which must be paid in cash with 5% payable in kind. It is due in March 2013.
The investors also received warrants for 12,587,511 shares, which are exercisable at $1.62. The strike price reflects a 23.22% premium to the Nov. 16 closing share price of $2.11.
The company is obligated to use about $20 million of the loan proceeds to repay debt, interest and closing fees owed to the lenders.
K-V is a St. Louis specialty pharmaceutical company.
Issuer: | K-V Pharmaceutical Co.
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Issue: | Term loan
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Amount: | $60 million
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Maturity: | March 2013
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Coupon: | 16.5%
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Price: | Par
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Yield: | 16.5%
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Warrants: | For 12,587,511 shares
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Warrant strike price: | $1.62
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Investors: | U.S. Healthcare I, LLC and U.S. Healthcare II, LLC
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Settlement date: | Nov. 17
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Stock symbol: | NYSE: KV.A
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Stock price: | $2.42 at close Nov. 17
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Market capitalization: | $120.64 million
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