|Date Announced:||May 02, 2018|
|Date Closed:||September 06, 2018|
|Client Name:||Ad Hoc Committee of Unsecured Debtholders of Concordia International Corp.|
Concordia International Corp. (TSX: CXR), an international specialty pharmaceutical company focused on becoming a leader in European specialty, off-patent medicines, completed the recapitalization of approximately US$4 billion of secured and unsecured debt in September 2018 pursuant to a plan of arrangement under the Canada Business Corporations Act (CBCA).
Concordia operates out of facilities in Mississauga, Ontario and, through its subsidiaries, operates out of facilities in Bridgetown, Barbados; London, England and Mumbai, India. Concordia has sales in more than 90 countries and a portfolio of more than 200 patented and off-patent products, and is listed on the Toronto Stock Exchange.
On October 20, 2017, Concordia commenced proceedings under the CBCA and obtained a “Preliminary Interim Order” from the Ontario Superior Court of Justice (Commercial List). This order provided the company with a stay of proceedings while it continued ongoing discussions with an Ad Hoc Committee of Secured Debtholders and Ad Hoc Committee of Unsecured Debtholders regarding a potential recapitalization transaction to improve its capital structure and reduce the company’s approximately US$4 billion of secured and unsecured debt obligations.
Following extensive discussions and negotiations, on May 2, 2018, Concordia announced its proposed recapitalization transaction supported by the Ad Hoc committees to, among other things:
- raise US$586.5 million of new capital pursuant to a private placement in exchange for approximately 88 percent of the recapitalized company’s shares upon implementation of the recapitalization transaction,
- reduce Concordia’s total debt by approximately US$2.4 billion and
- reduce its annual cash interest expense by approximately US$170 million.
On May 2, 2018, Concordia also obtained from the Court an interim order in its CBCA proceedings authorizing, among other things, the calling and holding of shareholder and debtholder meetings to consider and vote on Concordia’s proposed plan of arrangement pursuant to which the recapitalization transaction would be implemented.
The plan of arrangement was approved by approximately 87 percent of Concordia’s shareholders and 100 percent of Concordia’s debtholders that voted on the plan at the shareholder and noteholder meetings held on June 19, 2018, and was approved by the Court at the final hearing held on June 26, 2018. The recapitalization transaction was completed on September 6, 2018, providing Concordia with an improved capital structure and stronger financial foundation for future growth and success in a competitive industry.