Array BioPharma Announces $30 Million Debt Reduction and a Loan Term Extension to 2015 and 2016
BOULDER, Colo.--(BUSINESS WIRE)-- Array BioPharma Inc. (NASDAQ:ARRY - News) today announced that it has entered into agreements to modify its credit facility with Deerfield Partners and to issue $30 million of its Series B Preferred Stock to entities affiliated with Deerfield. The proceeds of the sale of the Preferred Stock will be applied to reduce the total principal under the credit facility from $120 million to $90 million, with approximately $7 million of previously accrued interest remaining outstanding.
The credit facility term will be extended from April 2014 to June 2015 and June 2016, and the principal and accrued interest will be re-paid as follows:
1. Remitting 15% of up-front and milestone payments Array receives from new partnering deals – through June 2016
2. The remaining balance, less $20 million, will be repaid June 2015
3. The remaining balance of up to $20 million will be repaid June 2016
The currently effective annual interest rate remains unchanged at 7.5% of the outstanding principal balance. The accrued interest is non-interest bearing. As part of the modification to the credit facility, Array also agreed to extend the term of the outstanding warrants owned by Deerfield to June 30, 2016 from April 2014.
Array will issue 10,135 shares of Series B Preferred Stock at an aggregate purchase price of $30 million to entities affiliated with Deerfield Partners. The Preferred Stock has a liquidation preference of $0.001 per share, is non-voting and convertible into an aggregate of 10,135,000 shares of Array Common Stock, provided that conversion will be prohibited if the holder and its affiliates would own more than 9.985% of the total number of Array shares of Common Stock then outstanding.
The securities described above are being offered directly by Array pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission (SEC). A prospectus supplement relating to the offering will be filed with the SEC. As described above, the proceeds from the offering will be used to repay $30 million in outstanding debt under the Deerfield credit facility. The closing of this offering is expected to occur on or about May 3, 2011, subject to satisfaction of customary closing conditions contained in a Securities Purchase Agreement between Array and Deerfield. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
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