Dr. Reddy’s Labs to acquire eight U.S. drugs from Teva & Allergan for $350m

India-based pharma firm drugmaker Dr Reddy’s Laboratories Ltd has reached an agreement to acquire eight generic brands of drugs from Teva Pharmaceutical Industries and Allergan Plc for $350m in cash to bolster its U.S. business.

The deal is part of Teva Pharma’s plan to divest certain brands of generics in the U.S. market to gain regulatory approval for its $40.5bn merger with Allergan.

The deal consists of generic drugs awaiting U.S. approval, and some that are already on the market, including “complex generic products across diverse dosage forms”.

The branded versions of drugs under the deal had U.S. sales of about $3.5bn in the year to April 2016 (Source: IMS Health).

Dr Reddy’s plans to finance the deal with cash on hand and available borrowings under existing credit facilities.

Source: Reuters

Symantec to acquire Blue Coat Systems Inc. for $4.6bn in an all-cash transaction

Symantec Corp. plans to acquire Blue Coat Systems Inc. for $4.65bn in an all-cash transaction to beef up its cyberdefense technology and fill its vacant chief executive officer position.

Blue Coat’s CEO Greg Clark would become CEO of the combined company after the deal closes by 3Q 2016 in September.

Synergies from the deal would result in additional cost savings of $150m annually, over an expected $400m.

As part of the deal, PE sponsor Bain Capital LLC, which controls Blue Coat, will put $750m of its proceeds from the sale into the combined company. Private equity firm Silver Lake will double its investment to $1bn.

Source: Bloomberg

Hyundai Merchant’s shares fall on concern of share dilution in debt swap

Shares of Hyundai Merchant Marine Co. plunged 19% in trade today, the most in 3 months, as investors worried that the company’s debt-to-equity exchange plan would dilute their shareholding.

Hyundai Merchant’s stock declined to KRW 15,000 in trade in Seoul, today.Rival firm Hanjin Shipping‘s shares also dropped as much as 9.2%, as investors feared a similar outcome, as the company is in negotiations with lenders about a possible swap, similar to Hyundai’s.

Hyundai Merchant will issue 236m new shares to its creditor banks, bondholders and shipowners in the debt-for-equity swap as part of its restructuring plan.

The plan follows South Korea’s Finance Minister Yoo Il Ho’s call for restructuring in the shipping industry as weak demand and dwindling cash levels hurt the companies.

The nation also prepares to start a KRW 11tn fund aimed at restructuring its ailing shipbuilding industry.

Source: Bloomberg

South Korea’s KRW 11tn fund to aid its ailing shipping industry

The Government of South Korea plans to create a KRW 11tn ($9.5bn) fund to support restructuring of the nation’s shipping and shipbuilding industries. The move comes in line with the central bank’s decision to lower benchmark borrowing rates as part of pulling the nation’s economy out of its slump.

The government aims to start operating the fund from 1 July 2016 until the end of 2017.

According to South Korea’s Finance Minister Yoo Il Ho, the fund would buy hybrid bonds issued by state-run banks.

Separately, the finance ministry plans to inject KRW 1tn of capital into the Export-Import Bank of Korea by September 2016 to ensure Kexim’s capital ratio doesn’t fall by too much.

The government currently estimates that these lenders would require about KRW 5 – 8tn of capital, assuming that Korea Development Bank and Kexim meet BIS ratios of 13% and 10.5%, respectively. KDB’s ratio currently was at 14.6% while Kexim’s was 9.9%.

Source: Bloomberg

Seadrill agrees to debt-to-equity exchange

Offshore drilling services provider Seadrill Ltd. agreed to a debt-to-equity exchange with certain bondholders as part of its broader debt restructuring plan.

The company agreed to issue a total of 7.5m new equity shares having par value of $2 per share in exchange for $50m principal amount of the 5.625% Senior Unsecured notes due 2017.

Settlement of this offer was expected to occur on 13 June 2016, upon which the company would have a total of 508,444,280 shares of its common stock outstanding.

Source: Seadrill Ltd. Press Release

AB INBev’s acquisition of SABMiller close to winning Chinese approval

According to sources, Anheuser-Busch InBev NV’s $107bn acquisition of rival SABMiller Plc was nearing regulatory approval from China’s Ministry of Commerce, seen to come as soon as this month based on typical review timelines, thus, clearing one of the final hurdles for the deal.

Previously, the deal had secured regulatory clearance from the European Union.

One of the conditions put forth by the regulatory body which asked for the divestiture of operations of the Snow beer, was accepted by the two companies.

The companies agreed to sell SABMiller’s 49% stake in its joint venture with China Resources Beer (Holdings) Co., which controls Snow beer, back to its partner for $1.6bn, a deal which was also nearing approval from China’s commerce ministry.

Following divestitures, the deal will keep Budweiser, Beck’s and Stella Artois under AB InBev’s roof, while ceding control of brands including Miller in the U.S. and Peroni and Pilsner Urquell in Europe.

In the U.S., AB InBev has agreed to sell SABMiller’s stake in the MillerCoors joint venture.

Source: Bloomberg

 

 

Seventy Seven Energy files for ‘prepackaged’ restructuring

U.S.-based oil field services provider Seventy Seven Energy Inc. filed for a pre-packaged bankruptcy with $1.1bn of debt amid depressed oil prices.

Under the terms of the restructuring plan, the company’s 2019 unsecured bondholders will receive at least 96.75% of the restructured company’s equity in exchange for debt of $650m.

A second group of bondholders are slated to get a 3.25% equity stake plus warrants for 15% of the new common stock if they vote to support the plan.

The company’s term-loan lenders will receive a 2% payout of their loan upfront and a better collateral package securing the remaining loan, which will be carried over.

The incremental term-loan lenders will be paid at least $15m upfront, and the remaining $84m balance of its loan will remain in place.

Additionally, current equity holders will receive warrants for 20% of new common stock if all the debtholders vote for the plan.

Seventy Seven said its trade creditors, suppliers and contractors will be paid in the ordinary course of business.

The company’s lenders, led by Wells Fargohave agreed to provide $100m in financing to fund the chapter 11 case, which Seventy Seven hopes to complete within 60 days.

Previously, the company had raised the possibility of bankruptcy in a February 2016 regulatory filing and hired advisers from Lazard to help it restructure its business.

The law firm Baker Botts is handling the company’s chapter 11 case, and the company has hired Alvarez & Marsal as its restructuring adviser. The case number is 16-11409 and Judge Laurie Selber Silverstein has been assigned the case.

Source: WSJ