Concordia International Corp (NASDAQ:CXRX) announced recently a projected transaction that will significantly realign its capital structure. The company intends to raise $586.5 million new equity capital in order to reduce its outstanding debt by $2.4 billion and its annual interest costs by about $171 million. In addition, the company is focusing on building a strong financial ground to support its long-term goal and meet its stakeholders’ demands.
The company signed an agreement with its creditors to reduce its debt burden, which will include reshuffling its top management executives. Concordia also plans to raise new funds through offering the private equity rights and secured debt worth $1.4 billion while at the same time reducing its annual interest expenses. The plan has already received an approval from the Ontario court to pursue its recapitalization transaction endeavors.
Concordia’s debt increased rapidly during the growth stage basically due to the huge acquisitions. The company has not posted any positive annual profit since 2014. Currently, the company believes it has enough liquidity to carry on its business operations and can meet its daily financial commitments without any limitations including fulfilling its responsibilities to the employees, suppliers, and customers.
Company’s Leadership Transition
Concordia’s current CEO Allan Oberman will be replaced by Graeme Duncan, who was serving as the president of Concordia’s International segment since 2016. Since last year, Concordia has been working closely with its creditors to streamline its balance sheet basing on the Canada Business Corporations Act. Oberman is leaving the company to pursue other opportunities.
According to Jordan Kupinsky, Chairman of the Board of Directors at Concordia, Graeme brings on board extensive experience in the pharmaceutical industry. He has over 20 years in healthcare and life sciences experiences and has worked in different capacities in various sections including commercial, strategy and general management at GlaxoSmithKline, Healthcare at Home, and IVAX Pharmaceuticals.
Furthermore, the company has replaced Chief Corporate Development Officer, Sarwar Islam (who is leaving the company) with Guy Clark, a former Chief Strategy Officer at AMco Pharmaceuticals.