After defaulting on a loan and cutting it close to a deadline to repay its debenture holder, Warnex has been granted a last-minute reprieve. The Canadian CRO will now have until April 13 to reimburse Persistence Capital Partners the $959,420 Canadian it owes. An agreement brokered between the two will also give PSP more than 46 million common shares of Warnex, giving the company ownership of around 51% of the CRO's outstanding common shares.
Originally, Warnex had until April 3 to repay CA$882,095 to the debenture holder, it said in a company statement.
Default is one of many changes the company has faced within last month. Almost two weeks ago, Chief Financial Officer François Jetté departed from Warnex to pursue other career opportunities, forcing Warnex to delay the release of its 2011 financials, Outsourcing-Pharma reports. And as it predicted in March, Warnex will be ousted from the Toronto Stock Exchange by April 16, a move that will come as its stock has sunk to as low as 2.5 cents a share Wednesday.
The Laval, Quebec-based company began to confront its money woes in November 2011 by unveiling a plan to relieve its mounting debt--selling pieces of it off. Warnex put the plan into effect the following month with the successful sale of its medical laboratories division, a move that brought in proceeds of CA$7.5 million. Warnex continued in the same direction and was on the verge of selling its analytical services division, until the prospective buyer failed to live up to its purchase obligations. That deal fell through in February.
For Warnex to keep itself up, it will secure a one-year operating line of credit worth CA$2 million, something now possible thanks in large part to the loan extension. That would not only allow Warnex to repay its debentures, but also maintain its working capital, while keeping its corporate duties in check. It has since appointed a temporary CEO and CFO.
As for plans to continue to put branches of the company on the market, Warnex maintains that third parties have expressed interest in acquiring its analytical and bioanalytical divisions. Whether there will be an actual sale, however, remains to be seen.
- read Warnex's release here
- check out the article from Outsourcing-Pharma