Sale Transaction Would Result in a Substantial
Reduction of Debt and Contemplates Purchaser-Established Voluntary
Trusts Funded with $550 Million to
Benefit Opioid Claimants
Patients and Customers Will Continue to
Receive Highest Quality Products and Excellent Service
Ample Liquidity to Fund Day-to-Day Operations
and Ordinary Course Investments During Court-Supervised
Process
DUBLIN, Aug. 16,
2022 /PRNewswire/ -- Endo International plc (NASDAQ:
ENDP) ("Endo" or the "Company") today announced that it has entered
into a restructuring support agreement ("RSA") with holders of more
than a majority of Endo's first lien debt on a sale transaction
that would substantially reduce outstanding indebtedness, address
remaining opioid and other litigation-related claims, and best
position Endo for the future. This will allow Endo to advance its
business transformation with a strengthened balance sheet to create
compelling value for its stakeholders over the long term.
Under the RSA, the debtholder group has committed to providing
total purchase consideration of approximately $6 billion in the form of a credit bid, plus
assumption of certain liabilities, for substantially all of the
Company's assets. The transaction contemplates that the purchaser
will:
- Offer employment to all of Endo's active team members;
- Establish voluntary trusts, to be funded with $550 million over 10 years, whereby future
proceeds will be set aside for certain opioid claims; and
- Have net funded leverage in an amount no greater than
4.5x.
This "stalking horse" bid will be subject to higher or otherwise
better offers.
To facilitate the sale process and provide an appropriate forum
for bringing closure to opioid-related and other uncertainties
without the need for continued costly, time-consuming litigation,
Endo and certain of its subsidiaries initiated voluntary
prearranged Chapter 11 proceedings in the U.S. Bankruptcy Court for
the Southern District of New York
("Court"). Endo's India-based
entities are not part of the Chapter 11 proceedings. The Company
expects to file recognition proceedings in Canada, the United
Kingdom, and Australia.
"Today's announcement is a significant milestone as we advance
our strategic priorities and business transformation so that Endo's
value proposition can be realized," said Blaise Coleman, Endo's President and Chief
Executive Officer. "By definitively addressing the more than
$8 billion of debt that has burdened
our balance sheet and establishing a pathway to closure with
respect to the thousands of opioid-related and other lawsuits that
the Company has been defending at an unsustainable cost, we will be
able to move forward as a new Endo and reach our full
potential."
Mr. Coleman continued, "This process will enable us to continue
our ongoing business transformation, including investing in our
core areas of growth, as we work to execute a transaction to
strengthen our balance sheet and secure a strong tomorrow. Our
commitment to our mission, team members, customers, patients, and
communities will not change, and we look forward to emerging from
this process better positioned to continue helping everyone we
serve live their best lives."
The Company's secured creditors have consented to use of cash
collateral to fund the Company's day-to-day business during the
process. This significant cash on hand, coupled with positive cash
flow from operations, will provide ample liquidity as the Company
continues to deliver the life-enhancing products that its customers
and their patients expect today and in the future. Notably, the
Company and a consortium of state attorneys general have agreed on
certain injunctive terms relating to the sale of Endo's opioid
products, including with respect to promotion, funding/grants to
third parties, and suspicious order monitoring, which will be
presented to the Court for approval.
The Company is filing with the Court a series of customary
motions to maintain business-as-usual operations on all fronts and
uphold its commitments to its stakeholders, including team members,
customers, suppliers, and business partners, during the process.
Approval of these routine "first day" motions, which the Company
expects to receive in short order, will help facilitate a smooth
transition into the process.
Additional Information
Additional information about Endo's financial restructuring is
available at endotomorrow.com. Court filings and information about
the claims process are available at
https://restructuring.ra.kroll.com/endo; by calling the Supplier
Hotline at (877) 542-1878 (toll-free) or +1 (929) 284-1688
(international); or by emailing EndoInquiries@ra.kroll.com.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
counsel, PJT Partners LP is serving as investment banker, and
Alvarez & Marsal is serving as financial advisor to
Endo.
About Endo International plc
Endo (NASDAQ: ENDP) is a specialty pharmaceutical company
committed to helping everyone we serve live their best life through
the delivery of quality, life-enhancing therapies. Our decades of
proven success come from passionate team members around the globe
collaborating to bring the best treatments forward. Together, we
boldly transform insights into treatments benefiting those who need
them, when they need them. Learn more at www.endo.com or
connect with us on LinkedIn.
Forward-Looking Statements
Certain information in this communication may be considered
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and any applicable
Canadian securities legislation, including, but not limited to,
statements with respect to the restructuring support agreement and
the sale transaction, the Chapter 11 proceedings and recognition
proceedings, and any other statements that refer to our expected,
estimated or anticipated future results or that do not relate
solely to historical facts. Statements including words or phrases
such as "believe," "expect," "anticipate," "intend," "estimate,"
"plan," "will," "may," "look forward," "intend," "guidance,"
"future," "potential" or similar expressions are forward-looking
statements. All forward-looking statements in this communication
reflect Endo's current views as of the date of this communication
about its plans, intentions, expectations, strategies and
prospects, which are based on the information currently available
to it and on assumptions it has made. Actual results may differ
materially and adversely from current expectations based on a
number of factors, including, among other things, the following:
the outcome of our contingency planning and restructuring
activities; the timing, impact or results of any pending or future
litigation, investigations, proceedings or claims, including
opioid, tax and antitrust related matters; actual or contingent
liabilities; settlement discussions or negotiations; the Company's
liquidity, financial performance, cash position and operations; the
Company's strategy; risks and uncertainties associated with Chapter
11 proceedings; the negative impacts on the Company's businesses as
a result of filing for and operating under Chapter 11 protection;
the time, terms and ability to confirm a sale of the Company's
businesses under Section 363 of the U.S. Bankruptcy Code; the
adequacy of the capital resources of the Company's businesses and
the difficulty in forecasting the liquidity requirements of the
operations of the Company's businesses; the unpredictability of the
Company's financial results while in Chapter 11 proceedings; the
Company's ability to discharge claims in Chapter 11 proceedings;
negotiations with the holders of the Company's indebtedness and its
trade creditors and other significant creditors; risks and
uncertainties with performing under the terms of the restructuring
support agreement and any other arrangement with lenders or
creditors while in Chapter 11 proceedings; the Company's ability to
conduct business as usual; the Company's ability to continue to
serve customers, suppliers and other business partners at the high
level of service and performance they have come to expect from the
Company; the Company's ability to continue to pay employees,
suppliers and vendors; the ability to control costs during Chapter
11 proceedings; adverse litigation; the risk that the Company's
Chapter 11 cases may be converted to cases under Chapter 7 of the
Bankruptcy Code; the Company's ability to secure operating capital;
the Company's ability to take advantage of opportunities to acquire
assets with upside potential; the Company's ability to execute on
its strategic plan to pursue, evaluate and close an asset sale of
the Company's businesses pursuant to Section 363 of the U.S.
Bankruptcy Code; the impact of competition, including the loss of
exclusivity and generic competition for VASOSTRICT®; our ability to
satisfy judgments or settlements or pursue appeals including
bonding requirements; our ability to adjust to changing market
conditions; our ability to attract and retain key personnel; our
inability to maintain compliance with financial covenants and
operating obligations which would expose us to potential events of
default under our outstanding indebtedness; our ability to incur
additional debt or equity financing for working capital, capital
expenditures, business development, debt service requirements,
acquisitions or general corporate or other purposes; our ability to
refinance our indebtedness; a significant reduction in our
short-term or long-term revenues which could cause us to be unable
to fund our operations and liquidity needs or repay indebtedness;
supply chain interruptions or difficulties; changes in competitive
or market conditions; changes in legislation or regulatory
developments; our ability to obtain and maintain adequate
protection for our intellectual property rights; the timing and
uncertainty of the results of both the research and development and
regulatory processes, including regulatory decisions, product
recalls, withdrawals and other unusual items; domestic and foreign
health care and cost containment reforms, including government
pricing, tax and reimbursement policies; technological advances and
patents obtained by competitors; the performance, including the
approval, introduction, and consumer and physician acceptance of
new products and the continuing acceptance of currently marketed
products; our ability to integrate any newly acquired products into
our portfolio and achieve any financial or commercial expectations;
the impact that known and unknown side effects may have on market
perception and consumer preference for our products; the
effectiveness of advertising and other promotional campaigns; the
timely and successful implementation of any strategic initiatives;
unfavorable publicity regarding the misuse of opioids; the
uncertainty associated with the identification of and successful
consummation and execution of external corporate development
initiatives and strategic partnering transactions; our ability to
advance our strategic priorities, develop our product pipeline and
continue to develop the market for QWO® and other products;
and our ability to obtain and successfully manufacture, maintain
and distribute a sufficient supply of products to meet market
demand in a timely manner. In addition, U.S. and international
economic conditions, including consumer confidence and debt levels,
taxation, changes in interest and currency exchange rates,
international relations, capital and credit availability, the
status of financial markets and institutions, the impact of and
response to the ongoing COVID-19 pandemic and the impact of
continued economic volatility, can materially affect our results.
Therefore, the reader is cautioned not to rely on these
forward-looking statements. Endo expressly disclaims any intent or
obligation to update these forward-looking statements, except as
required to do so by law.
Additional information concerning risk factors, including those
referenced above, can be found in press releases issued by Endo, as
well as Endo's public periodic filings with the U.S. Securities and
Exchange Commission and with securities regulators in Canada, including the discussion under the
heading "Risk Factors" in Endo's most recent Annual Report on Form
10-K and any subsequent Quarterly Reports on Form 10-Q or other
filings with the U.S. Securities and Exchange Commission. Copies of
Endo's press releases and additional information about Endo are
available at www.endo.com or you can contact the Endo Investor
Relations Department at relations.investor@endo.com.
Media Contact:
Daniel Yunger / Sherri L. Toub
Kekst CNC
EndoMediaInquiries@kekstcnc.com
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SOURCE Endo International plc
