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Shares of Valeant Pharmaceuticals International ( VRX ) rose sharply for the third day in a row Thursday, after the company came to an agreement with its creditors to avoid a default. Valeant said lenders had agreed to an amendment extending the filing deadline for its 10-K annual financial report to May 31, and its 10-Q for Q1 to July 31. Previously, both were due at the end of March, though the agreement gave Valeant 30 days after that to file to prevent a default. The amendment also waives the cross-default to Valeant’s indentures, which was set off when the company failed to file its 10-K by March 15. Valeant is late in its filing because of a review of its financial records that it started after a scandal erupted last fall surrounding its relationship with now-defunct pharmacy Philidor. On Tuesday, the company said the review was complete , so it expects to file the 10-K this month. The new agreement gives it a bit more breathing room. Valeant said the amendment also will affect its M&A capabilities. “The terms of the amendment will restrict the company’s ability to make certain acquisitions and other investments and to pay dividends and other restricted payments until the financial statements are filed and the company achieves certain leverage ratios,” Valeant’s statement said. “While these restrictions are in place, the company will also be required to apply substantially all net asset sale proceeds to prepay its term loans.” Valeant has become highly levered through a series of acquisitions that have quickly bulked up the company, but the management put acquisitions on hold after the Philidor scandal broke. No asset sales have been announced, though Wall Street has been speculating that the company will be slimmed down or even broken up. On Wednesday, several analysts and reporters asked Allergan ( AGN ) CEO Brenton Saunders if Allergan might acquire Bausch & Lomb , a business that Valeant bought in 2013 back when Saunders was running it. Valeant stock was up almost 6% in late morning trading on the stock market today , near 36. The stock has risen about 30% this week despite hitting a five-year low on Monday, as investors have been heartened by the completion of the financial review as well as promises of a new CEO in the near future. Scalper1 News
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