£44 million Bank Facilities

RNS Number : 7714W

Alliance Pharma PLC

25 November 2010

 



For immediate release

25 November 2010

 

ALLIANCE PHARMA PLC

("Alliance" or the "Company")

£44 million Bank Facilities

Alliance Pharma plc (AIM: APH), the speciality pharmaceutical company, announces that it has successfully negotiated new enlarged bank facilities of up to £44 million with Lloyds TSB Corporate Markets at an effective rate of around 4% per annum to replace its existing facilities.

The new facilities comprise an £18 million term loan repayable over four years, a £20 million four year revolving credit facility (RCF) and a £6 million working capital facility.  The initial drawing on the RCF will be £2.0 million, leaving £18.0 million headroom potentially available to fund acquisitions.

In addition the Group has terminated the existing interest rate swaps.  Together with the cost of writing off loan issue costs, this will lead to an exceptional charge of around £1.8 million in 2010.  New interest rate swaps have been put in place to hedge approximately 75% of net bank debt at current market rates.

The overall impact of these changes is expected to be a reduction of more than 5% per annum in the effective interest rate applied to the Group's bank debt. 

The main financial covenants applying to the new facilities are that leverage (the ratio of net debt to EBITDA) should not exceed 2.5 times, interest cover (the ratio of EBITDA to finance charges) should not be less than 3.0 times and operating cash flows must exceed debt service cash flows.  The maximum leverage reduces to 2.0 times from 2012.

Commenting on the re-financing, Richard Wright, Alliance Pharma's Finance Director, said: "We are delighted to put in place these new facilities.  They deliver a significant reduction in cost, an extended maturity profile and leave Alliance well placed to fund acquisition opportunities as they arise."

Product Update

In its Interim Results published on 8 September 2010 the Company indicated that a second generic competitor to its Deltacortril product was expected to enter the market within months.  The additional competitor has been launched this week.  Before the impact of the refinancing announced today, pre-tax profits for 2010 are expected to be in line with market expectations.

For further information:

Alliance Pharma plc	+ 44 (0) 1249 466966
John Dawson, Chief Executive Officer
Richard Wright, Finance Director
Buchanan Communications	+ 44 (0) 20 7466 5000
Mark Court / Jessica Fontaine
Numis Securities Limited	+ 44 (0) 20 7260 1000
Nominated Adviser: Michael Meade / Simon Blank
Corporate Broking: David Poutney

Notes to editors:

About Alliance

Alliance, founded in 1998, is an AIM listed speciality pharmaceutical company based in Chippenham, Wiltshire, UK. The Company has a strong track record of acquiring the rights to established niche products and owns or licenses the rights to more than 50 pharmaceutical products and continues to explore opportunities to expand the range.

Alliance's products are prescribed in the treatment of a wide range of conditions and include products used in the treatment of dermatological conditions, in oncology, in childbirth, in the prevention of heart disease, in Parkinson's disease, in nutrition and in nasal infections.  Alliance's sales are mainly prescription driven.  Its products are distributed both to hospitals directly and to pharmaceutical wholesalers, which in turn service both hospital and retail pharmacies with their prescription requirements.

Alliance joined the AIM market of the London Stock Exchange in December 2003 and trades under the symbol APH.

 

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