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LONDON (Alliance News) - BioPharma Credit PLC on Tuesday said it will now receive a USD370.0 million loan repayment as GlaxoSmithKline PLC has completed its Tesaro Inc acquisition.
The blue-chip Glaxo announced it had completed the acquisition of US pharma business Tesaro on Tuesday and, as a consequence, Tesaro will repay its USD500.0 million loan - as well as a make-whole and prepayment premium.
BioPharma Credit invests in life science industry debt and will receive a USD370.0 million payment on its USD322.0 million share of the USD500.0 million loan.
Of this, USD45.7 million or 14% will be make-whole and prepayment. This USD45.7 million is equivalent to what BioPharma Credit would have received if the loan had remained outstanding for a further 15 months.
Once the Tesaro repayment is made, BioPharma Credit will have a USD760.0 million cash balance. This is to be put toward future investments, and will also be used to meet the firm's pre-agreed investment obligation and upcoming dividends, the company said.
The firm's investment manager, Pharmakon Advisors, predicts that BioPharma Credit will be capable of redeploying its cash reserves in the next 12 months.
"The company continues to note a highly supportive environment for its investment strategy and looks forward to updating shareholders on the further deployment of funds," said BioPharma Credit in the statement Tuesday.
Shares in BioPharma Credit closed down 0.9% at USD1.05 on Tuesday.
