Drugmaker Endo misses bail payment as potential bankruptcy looms

(Bloomberg) – Endo International Plc, the latest drugmaker pushed to the brink by opioid lawsuits, said it skipped a $38 million interest payment as it considered options, including including a potential bankruptcy filing.

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This decision, which affects the company’s debentures, means the company sided with senior creditors, who argued that it was better for the company to skip payment of the bonds and reorganize into bankruptcy case. Endo has 30 days to return the missing money before it becomes a formal default. The company elected to skip the payment while continuing to discuss with creditors ways to provide debt relief, Endo said in a regulatory filing.

The company has been discussing its options with groups of creditors who have differing views on the best course of action to deal with lawsuits over its role in the U.S. opioid epidemic, growing debt and a bleak outlook. for its top-selling drug.

The company’s major lenders are in favor of bankruptcy and want the company to skip upcoming interest payments to preserve cash, according to people familiar with the talks. Endo’s lower ranking creditors are pushing for options that would restructure his debts outside of court.

Before Endo skipped the payout, Bloomberg Intelligence credit analyst Mike Holland said the company was likely looking to take such a step as Endo significantly lowered its earnings expectations following competition for his main drug, Vasostrict.

“Much to the dismay of vocal junior bondholders, it seems likely that secured lenders and secured bondholders will be able to drive an eventual restructuring process,” Holland said earlier this week.

Endo representatives did not return calls and emails seeking comment.

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Elaine R. Knight