Valeant faces possible default

News

Valeant pharmaceuticals has warned that it could default if it fails to file an annual report by 29 April.

In a statement to the US financial regulator, embattled Valeant said if it fails to file the report by 30 March, a default will occur under credit agreements with banks.

The company will then have until 29 April to file the report and cure the default, according to the statement.

It has already missed a deadline yesterday for filing the report, which means lenders and holders of at least 25% of any series of notes may deliver a notice of default.

Analysts said that a default would mean that the company has to repay debts immediately.

Valeant has delayed filing the report while it resolves accounting issues related to Philidor, the pharmacy chain it had an option to buy that also distributed many of its drugs.

Valeant has cut ties with Philidor and now distributes many of its drugs through Walgreens.

Shares in Valeant were down more than 50% at $33.54 on the New York Stock Exchange yesterday, and down from a peak of more than $260 last August.

The company is also under investigation by federal prosecutors over pricing of its drugs.