Wednesday, October 22, 2008

Oscient begins shareholder exchange offer

By Mass High Tech Staff

Waltham-based Oscient Pharmaceuticals Corp. said it has begun its previously announced exchange offer for holders of the company’s 3.5 percent convertible senior notes due 2011, in an effort to reduce the company’s debt.

The offer involves $225.7 million in principal for company stock and $67.7 million aggregate principal amount of new 12.5 percent convertible senior notes due 2011. Each $1,000 worth of the 3.5 percent convertible senior notes due 2011 is to be exchanged for $300 principal amount of new 12.5 percent convertible senior notes due 2011, in addition to company common stock worth about $200.

Oscient (Nasdaq: OSCI) announced the original plan for the exchange offer in September. This month, the company announced it had received a Nasdaq warning for its drop in market value below $15 million for 10 straight days, failing to meet the exchange’s minimum eligibility requirement for market listing.

The exchange offer closes on November 18, with Lazard Capital Markets LLC and MTS Securities LLC managing the deal.

Oscient develops pharmaceutical drugs for the treatment of high blood cholesterol and high triglycerides, as well as treatment for chronic bronchitis and pneumonia. For 2007, the company reported a net loss of $29.8 million on total revenue of $80 million.