K-V Pharmaceutical exits bankruptcy with $375 million recapitalization

By Caroline Salls

Pittsburgh, Sept. 16 - K-V Pharmaceutical Co. emerged from Chapter 11 bankruptcy on Sept. 16 "with significantly reduced debt and a $375 million recapitalization," according to a company news release.

According to a filing with the U.S. Bankruptcy Court for the Southern District of New York, K-V's plan of reorganization took effect on Sept. 16. The plan was confirmed on Aug. 29.

Under the plan, investors led by Capital Ventures International, Greywolf Capital, Kingdon Capital and Deutsche Bank, together with Silver Point Finance, and/or affiliates of each of those investors provided the majority of funding for the company's new $100 million credit facility and $275 million rights offering and direct purchase of new common shares.

Law Debenture Trust Co. of New York is the agent on the new $100 million first-lien secured term loan facility.

Interest will be Base rate plus 900 basis points for Base rate loans and Libor plus 1,000 bps for Libor loans.

The facility will mature on Jan. 31, 2018.

"As KV emerges from Chapter 11 today, we are a stronger, better capitalized and more competitive company with a solid financial foundation for future growth," chief executive officer Greg Divis said in the release. KV said its existing senior secured notes will be paid in full in cash, and general unsecured creditors will receive a share of $10.25 million.

KV's existing convertible subordinated noteholders will receive 7% of the company's new common shares plus any shares purchased through the rights offering or direct purchase of shares.

All existing preferred and common stock has been cancelled, and holders will receive no distribution.

K-V Pharmaceutical, a St. Louis specialty pharmaceutical company, filed for bankruptcy on Aug. 4, 2012. Its Chapter 11 case number is 12-13346.

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