3D rendering of a stent, a wire cage designed to prop open arteries after expansion by balloon angioplasty
Angiotech Pharmaceuticals, Inc. shares plunged Monday in the first day of trading since the Vancouver-based company announced a debt repayment plan that will leave current shareholders with only a small minority stake.
Its shares were down 20.5 cents or about 41 per cent with nearly 1.8 million shares traded by midmorning at the Toronto Stock Exchange, where Angiotech was one of the most heavily traded issues early Monday.
Angiotech announced Friday after markets closed that it has signed a deal that will see the drug developer's debtholders take over control of the company in exchange for cancelling $250-million in debt.
The company, a developer of medical equipment technology, had said previously that it wouldn't make $9.7-million of interest payments due on its notes as of Oct. 1.
Noteholders participating in the offer will hold about 90 per cent of the new shares of the company following the recapitalization.
The noteholders that agree to the terms of the agreement by Nov. 30 will also be entitled to receive additional shares.
The company has also signed a deal with holders of 51 per cent of its floating rate notes to exchange the notes for new ones.
Angiotech shareholders before the recapitalization will hold about 2.5 per cent the issued and outstanding common stock of Angiotech, as well as options to acquire 10 per cent of the new stock with a strike price that provides for a par recovery to the noteholders.
All existing options, warrants or other rights to purchase shares will be cancelled.