Leiden, The Netherlands, 14 January 2020: Pharming Group N.V. (“Pharming” or the “Company”) (Euronext Amsterdam: PHARM) announces today the placement of €125 million of senior unsecured convertible bonds due 2025 (the “Bonds”). The offer was fully subscribed. The Bonds were offered via an accelerated book building process through a private placement only to institutional investors outside the United States of America, Australia, South Africa and Japan.
The net proceeds of the issue of the Bonds will be used to redeem the approximately US$ 56 million loan with Orbimed Advisors in full, thereby reducing the Company’s financing costs and extending its debt maturity through the period to approval of most of the Company’s existing pipeline. The balance of the net proceeds will be used to support capital expenditure in relation to the expansion of the commercialisation and manufacturing infrastructure of the Company, and serve as funding for the launch of Pharming’s recently acquired Leniolisib product and for additional acquisitions/inlicensing opportunities.
Sijmen de Vries, Pharming CEO, said
“This is a superb new capital financing for Pharming, which does not dilute shareholders unless the share price increases significantly, and which represents the most cost efficient way to shareholders for the Company to refinance, enlarge and extend our previous debt facility. Further to having additional cash at hand to support funding our growth, launch plans and additional inlicensing opportunities, we are especially pleased that our financing costs will now be much lower, which will in turn increase our profitability and will significantly reduce the financing cash outflows”.
The Bonds will have a principal amount of €100,000 each. The Bonds will be issued at par and will carry a coupon of 3.00% per annum payable semi-annually in arrear in equal instalments. Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed at par on 21 January 2025.
The Bonds will be convertible into ordinary shares of the Company (the “Shares”) with the initial conversion price which has been set at €2.0028, representing a premium of 40% above the volume weighted average price (VWAP) of an ordinary share in the share capital of the Company on Euronext Amsterdam between opening of trading on the launch date and the pricing of the offering of the Bonds (i.e. €1.4306). This initial conversion price will be subject to customary adjustment provisions as will be set out in the terms and conditions of the Bonds.
The number of ordinary shares initially underlying the Bonds is 62,412,622, representing 9.9% of the Company’s current issued share capital. Any adjustment to the conversion price resulting in an increase in the number of conversion chares may require the Company to obtain further authorisation from its shareholders to issue Shares, grant rights to subscribe for Shares and exclude pre-emptive rights.
Further Details on the Bonds
Pharming will have the option to redeem all, but not some only, of the outstanding Bonds in cash at par plus accrued interest at any time, a) if, on or after 13 February 2023, the parity value on each of at least 20 dealing days in a period of 30 consecutive dealing days shall have exceeded 130% of the principal amount or b) if, at any time, 85% or more of the aggregate principal amount of the Bonds originally issued shall have been previously converted and/or repurchased and cancelled.
Closing and settlement of the offering are expected to take place on or around 21 January 2020 (the “Issue Date”).
Application will be made for the Bonds to be admitted to trading on the Open Market (Freiverkehr) of the Frankfurt Stock Exchange by no later than 20 February 2020.
In the context of the offering, the Company and the Company’s subsidiaries have agreed to a lock-up undertaking in respect of further issues of Shares and rights to acquire Shares for a period commencing on pricing and ending 90 calendar days following the Issue Date, subject to certain customary exceptions (including exceptions for existing approved employee share schemes) and waiver by the Sole Global Coordinator and Sole Bookrunner.
J.P. Morgan acted as Sole Global Coordinator and Sole Bookrunner for the offering of the Bonds.
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