Alere Said to Get Bondholder Default Notice on Filing Delayby
Alere Inc., the medical-testing supplier under federal scrutiny, received a notice of default from a group of bondholders after the company delayed filing its 2015 financial statement, according to people with knowledge of the matter.
Alere, which agreed in February to be bought by Abbott Laboratories for about $5.8 billion, hasn’t disclosed a default notice through regulatory filings. Some of the company’s senior lenders were told, over a private reporting system, of a March 21 default notice, the people said. They were given the information this month while Alere was negotiating for more time to file the annual financial report, said the people, who asked not to be identified because the information was private.
While the notice itself wouldn’t give lenders the right to immediately demand repayment, the default claim adds to a turbulent two months for the company. After announcing the deal with Abbott on Feb. 1, it told investors four weeks later that it was delaying its so-called 10-K statement while it analyzed how it recorded revenue in Africa and China. Last month, it said it was subpoenaed by the U.S. Justice Department over sales practices and dealings in Africa, Asia and Latin America.
While Alere was seeking a two-month extension to file its 10-K, the bondholder default notice could shorten that window to just a few more weeks, the people said. After that, lenders could demand repayment.
A spokeswoman for Alere didn’t respond to telephone and e-mail messages on Monday. A representative for Abbott declined to comment, as did representatives for Goldman Sachs Group Inc., the bank that facilitated the loan waiver, and U.S. Bank, the trustee for the bondholders.
The default notice was sent by U.S. Bank on behalf of investors holding at least 25 percent of its 2020 subordinated bonds because Alere delayed filing its annual financial report for last year, the people familiar with the private disclosure said.
After Valeant Pharmaceuticals International Inc. twice received similar default notices from bondholders this month, it disclosed them in public filings.
Abbott agreed to purchase Alere to boost its diagnostics sales. The deal would add tests for heart attacks, influenza and drug abuse to Abbott’s suite of products for testing genetic mutations that can assess patients’ reactions to pharmaceuticals or can help guide cancer therapy.
Alere’s stock dropped as much as 2.1 percent on Tuesday and has lost more than 20 percent since Abbott’s acquisition plan was disclosed. The shares were trading $42.75 at 9:51 a.m. in New York.