Valeant Pharmaceuticals International Inc. won the support of its lenders to waive a default and ease some restrictions on its loan pact as the drugmaker seeks to rein in its $32 billion debt load.
The company expects to close the amendment and waiver next week, according to a statement on Thursday. The agreement gives Valeant until May 31 to file its 10-K and extends the deadline for filing its first-quarter report to July 31. The waiver and amendment were approved by lenders holding more than 50 percent of the company’s loans in principal amount, the company said.
Lenders also agreed to let Valeant relax its interest coverage maintenance covenant, giving Valeant more time to weather a period of earnings weakness as it deals with the scrutiny of its accounting and business practices. On Tuesday, the company said that a special ad hoc board committee had found no additional accounting issues that would require more revisions to its earnings statements.
"This marks the second piece of good news for Valeant this week and paves the way for it to begin non-core asset sales," said Eric Axon an analyst at research firm CreditSights Inc.
The creditors gave their consent after Valeant revised terms Tuesday, vowing to boost the interest on its more than $11 billion of term loans by one percentage point. The company also pledged to funnel more cash from future asset sales to pay down debt.
Valeant shares rose 4.45 percent to $35.69 at 13:17 p.m. in New York. After plunging 90 percent since their peak in August, the stock has gained 22 percent this week, as of Wednesday’s close.