Drugmaker seeks deal to slash debt load

Concordia won court protection from creditors

TORON TO • Concordia International Corp., the drugmaker that won court protection from creditors last week as it negotiates a debt restructuring, is seeking to strike a deal to cut its debt load within weeks.

The company had the consent of creditor advisers to pursue the court protection and will seek to reach an agreement within four weeks, according to a person with knowledge of the matter, who asked not to be identified because the talks are private. Options being explored include a debt exchange in which creditors would swap their obligations for equity or new debt. The company said last week it also hasn’t ruled out a filing under Chapter 11 in the U. S. or the Companies’ Creditors Arrangement Act, the closest Canadian equivalent to the American bankruptcy law.

The pharmaceutical company, weighed down by US$ 3.7 billion in debt, announced Friday it’s pursuing a restructuring plan with its creditors under the Canada Business Corporations Act after it opted not to pay an interest payment and the maturity on a bridge loan due this month to preserve cash. Concordia was granted creditor protection until further notice by an Ontario court, which prevents its creditors from pushing it into default or pursuing other remedies to get money back.

Concordia will require a majority of the holders representing two- thirds of the value of each stakeholder class to approve its restructuring plan under CBCA, according to Stephanie BenIshai, a professor at York University’s Osgoode Hall Law School. The company will also require final sign-off from an Ontario judge.