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2006-01-12 06:30:01 Xechem Completes Repurchase of $3 Million Convertible Loan From Alembic; Alembic Surrenders 15% Equity Stake in Xechem's Nigerian Subsidiary and Broad Royalty Rights Under New Agreement
NEW BRUNSWICK, N.J.--(BUSINESS WIRE)--Jan. 12, 2006-- Xechem International, Inc. (OTC BB: XKEM) Xechem International announced today it has completed a comprehensive restructuring of its $3 million convertible loan with Alembic Limited, an Indian pharmaceutical company that had invested in Xechem in 2003. At the time of the original financing, Alembic received a substantial equity stake in Xechem and its Nigerian subsidiary, Xechem Pharmaceuticals Nigeria Limited, as well as the right to receive a gross royalty of 15% of Xechem Nigeria's total sales of NICOSAN(TM), the promising drug being developed by Xechem for the treatment of Sickle Cell Disease. Under the old financing arrangement, Alembic also was entitled to a 1% export fee for all revenues generated outside of Nigeria from the sale of the Company's sickle cell drug, 10 million warrants to purchase Xechem's common stock, and a right of first refusal for the distribution rights in Africa and India from the sale of its sickle cell drug. The loan had an original maturity date of April 2008, and was convertible at any time by Alembic into common stock of Xechem at a substantial discount to the then-current market price for the stock.
Transaction Dramatically Enhances Xechem's Bottom Line Potential From Sale Of NICOSAN(TM), Xechem's Sickle Cell Drug
Under the broad restructuring announced by Xechem, the amount of Xechem's obligation to Alembic remains unchanged at $3 million. However, in exchange for accelerated repayment terms, which include paying Alembic $1 million later this month with full repayment moved up to year-end 2006, as well as Xechem's pledge of certain collateral, Alembic has agreed to terminate all existing agreements, rights and obligations under the old loan arrangement, including its 15% equity interest in the Xechem Nigeria subsidiary, the gross royalty stream from both the Nigerian and U.S. operations, the warrants to purchase Xechem International stock and the right to convert its debt into Common Stock of Xechem. Dr. Ramesh C. Pandey, the Chairman and Chief Executive Officer of both Xechem International and its Nigerian subsidiary, said "For quite some time, we have been looking for a way to restructure the Alembic indebtedness in a manner that would allow us reclaim the equity stake in our Nigerian subsidiary and the royalty stream that was part of the package of rights transferred to Alembic at the time of the original loan. Alembic expressed a willingness to accommodate our desire as long as the repayment schedule was improved upon and certain collateral was posted. In the deal that was agreed to, Alembic got what it wanted, which was improved repayment terms and a measure of collateral, and we have again taken full control of our Nigerian subsidiary with the termination of broad rights and understandings that previously belonged to Alembic. I believe this truly was a win-win situation for both parties." Dr. Pandey went on to add that Alembic's return to Xechem of the equity stake in the Xechem Nigeria subsidiary and the gross royalty rights it previously held "should greatly enhance the prospects and bottom line success of our Nigerian and U.S. operations and may also increase the likelihood of our attracting private investment or raising money through the public markets, both in Nigeria and elsewhere."
Posts: 273 | Registered: May 2004
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4X 5 Day Avg. Volume, 3X the 10 Day Avg. Volume, 3X the 15 Day Avg. Volume ... and its only ~10:30
Posts: 273 | Registered: May 2004
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