What a difference a day (or two) makes.
Valeant has been talking to its lenders to try and amend the terms of some loans it has taken out.
The company had failed to file its 10-K by March 15, and a failure to file it before April 29 would have triggered a technical default on those loans.
On Monday, Valeant Pharmaceuticals’ creditors did not seem open to showing the company mercy by allowing Valeant to amend the terms of its debt.
Now, according to the WSJ, it looks like they will.
Valeant agreed to pay a fee of $50,000 per $10 million of loans to lenders for the amendment and to boost interest rates on the debt by 1 percentage point, though the rate could decline if Valeant achieves certain financial metrics, the person said.
The company needed more than half of the creditors of its $11 billion in secured loans to agree.
Valeant’s share price was up 18% during regular trading on Wednesday, and jumped another 4% in after-hours after the WSJ reported the loan agreement.
This all started when Valeant announced that it would delay the findings of its annual report due to a discrepancy found by its internal ad-hoc committee.
The committee was created to find any issues surrounding Valeant’s involvement with a once-secret distributor called Philidor. The committee found a $58 million error (a blip really, for a company Valeant’s size), and then concluded its investigation into Philidor on Tuesday.
Philidor’s existence was disclosed in October, when scrutiny over Valeant’s pricing practices combined with accusations of malfeasance from a short seller forced the company to acknowledge Philidor.
It looks like everyone wants to put that behind them though. We’ll see how that works.
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