Concordia International Corp. (“Concordia” or the “Company”) (TSX: CXR), an international specialty pharmaceutical company focused on becoming a leader in European specialty, off-patent medicines, completed the recapitalization of approximately US$4 billion of secured and unsecured debt in September 2018 pursuant to a plan of arrangement (the “CBCA Plan”) under the Canada Business Corporations Act (“CBCA”).
Concordia operates out of facilities in Mississauga, Ont. and, through its subsidiaries, operates out of facilities in Bridgetown, Barbados; London, England; and Mumbai, India. Concordia has sales in more than 90 countries and a portfolio of more than 200 patented and off-patent products, and is listed on the Toronto Stock Exchange.
On October 20, 2017, Concordia commenced proceedings under the CBCA (the “CBCA Proceedings”) and obtained a “Preliminary Interim Order” from the Ontario Superior Court of Justice (Commercial List) (the “Court”) that provided the Company with a stay of proceedings while the Company continued ongoing discussions with an Ad Hoc Committee of Secured Debtholders and Ad Hoc Committee of Unsecured Debtholders (collectively, the “Ad Hoc Committees”) regarding a potential recapitalization transaction to improve its capital structure and reduce the Company’s approximately US$4 billion of secured and unsecured debt obligations.
Following extensive discussions and negotiations, on May 2, 2018, Concordia announced its proposed recapitalization transaction (the “Recapitalization Transaction”) supported by the Ad Hoc Committees to, among other things, raise US$586.5 million of new capital pursuant to a private placement in exchange for approximately 88% of the recapitalized Company’s shares upon implementation of the Recapitalization Transaction, reduce Concordia’s total debt by approximately US$2.4 billion and reduce its annual cash interest expense by approximately US$170 million. On May 2, 2018, Concordia also obtained from the Court an interim order in its CBCA Proceedings authorizing, among other things, the calling and holding of shareholder and debtholder meetings to consider and vote on Concordia’s proposed CBCA Plan pursuant to which the Recapitalization Transaction would be implemented.
The CBCA Plan was approved by approximately 87% of Concordia’s shareholders and 100% of Concordia’s debtholders that voted on the CBCA Plan at the shareholder and noteholder meetings held on June 19, 2018, and was approved by the Court at the final hearing held on June 26, 2018. The Recapitalization Transaction was completed on September 6, 2018, providing Concordia with an improved capital structure and stronger financial foundation for future growth and success in a competitive industry.
Goodmans LLP represented Concordia in Canada with a team that consisted of Robert Chadwick, Brendan O’Neill, Caroline Descours and Loren Cohen (Restructuring), Celia Rhea, Theresa Kennedy and Ledya Yohannes (Banking), Tim Heeney, Dave Rosenblat (Corporate/Securities), Carrie Smit (Tax) and David Rosner (Competition). Skadden, Arps, Slate, Meagher & Flom LLP represented Concordia in the United States with a team led by Paul Leake and Shana Elberg (Restructuring) that included Carl Tullson and Robert Fitzgerald (Restructuring), Sarah Ward, David Passes, and Sahar Kamali (Banking), Ryan Dzierniejko Michael Saliba and Lester Chen (Capital Markets) and Sally Thurston (Tax), and in the United Kingdom with a team led by James Falconer (Restructuring).
Osler, Hoskin & Harcourt LLP represented the Ad Hoc Committee of Secured Debtholders in Canada with a team led by Marc Wasserman and Michael De Lellis (Restructuring) that included Martino Calvaruso and Justine Erickson (Restructuring), Eric Levy, Don Gilchrist and Andrew MacDougall (Corporate), Kevin Morley and Kashif Zaman (Banking & Financial Services), Jacqueline Code (Research), Firoz Ahmed and Emily Gilmour (Tax) and Shuli Rodal (Competition). White & Case LLP represented the Ad Hoc Committee of Secured Debtholders in the United States with a team that included Thomas Lauria, Harrison Denman, John Ramirez and Thomas Green (Restructuring), David Joyce, Jason Woolmer and Celeste Jackson (Banking), Kenneth Suh and Anastasiya Lisovskaya (Capital Markets) and Adam Cieply (Mergers & Acquisitions), and in the United Kingdom with a team that included Christian Pilkington, Ben Davies and Grant Clemson (Restructuring) and Morvyn Radlow (Banking).
Bennett Jones LLP represented the Ad Hoc Committee of Unsecured Debtholders in Canada with a team that included Kevin Zych and Sean Zweig (Restructuring), Kris Hanc (Corporate/Securities), Thomas Bauer (Tax), Dominique Hussey (IP), Steve Lutz and Adam Taylor (Financial Services). Paul, Weiss, Rifkind, Wharton & Garrison LLP represented the Ad Hoc Committee of Unsecured Debtholders in the United States with a team that included Andrew Rosenberg, Jacob Adlerstein, John Weber, Kellie Cairns and Michael Turkel (Restructuring), Catherine Goodall, David Epstein, Andrew Foley and Steve Centa (Corporate/Capital Markets), David Sicular (Tax), and Andrew Gains and Jason Ertel (Employee Benefits). Ashurst LLP represented the Ad Hoc Committee of Unsecured Debtholders in the United Kingdom with a team that included Giles Boothman, Amrit Khosa and Jack Isaacs (Restructuring).
Blake, Cassels & Graydon LLP represented the Secured Swap Lender and the existing Administrative Agent in Canada with a team that included Linc Rogers and Aryo Shalviri (Restructuring) and Michael Matheson (Banking). Cleary Gottlieb Steen & Hamilton LLP represented the Secured Swap Lender in the United States with a team that included Sean O’Neal, Humayun Khalid and Chelsey Rosenbloom. Davis Polk & Wardwell LLP represented the existing Administrative Agent in the United States with a team that included Damian Schaible, David Schiff and Veerle Roovers (Restructuring), and Monica Holland (Banking).
McMillan LLP represented the existing Notes Trustee in Canada with a team that included Michael Hanlon and Jeffrey Levine. Kelley Drye & Warren LLP represented the existing Notes Trustee in the United States with a team that included James Carr, Benjamin Feder, Pamela Bruzzese-Szczygiel and Wendy Clarke.
Shearman & Sterling LLP represented the GLAS Trust Company LLC as new Administrative Agent, Trustee and Collateral Agent with a team that included Alastair Goldrein and Maria Cornilsen.