Elan's bondholders have once again allowed the firm to avoid a crippling cash crunch by giving it more time to file its annual report for 2002 with the US Securities and Exchange Commission (SEC).
Elan said yesterday that a majority of the holders of $840 million (€743 million) of its debt had allowed it one more week to file the accounts.
The extension from the EPIL holders came as Elan missed a previously-agreed deadline for the filing yesterday and put itself in danger of triggering a debt default of as much as $2 billion.
Elan said it had not paid a fee in connection with the new waiver, which will expire on August 15th.
It also said that it could not provide assurances on when it would present the SEC with the 20-F form, which was originally due for filing at the end of June.
Agreements between Elan and its creditors require it to provide audited financial statements to the holders of its bonds. The first waiver of this requirement came at the end of July.
The new reprieve brings the company closer to the potentially more dangerous date of September 14th, on which a continuing failure to file could lead to a default of $650 million in senior debt.
Goodbody analyst, Mr Ian Hunter, said the holders of this "Athena" debt may not be so accommodating as the EPIL holders, whose debt is subordinate.
"This is the ultimate date," he said, predicting that the market would become more nervous over the 20-F issue if it had not been filed by Labor Day on September 1st, the traditional end of the US holidays.
Shares in Elan were punished on news of the latest delay, dropping 20 cents to finish at €4.15 in Dublin and closing 23 cents lower at $4.84 in New York, where it is mainly traded.
A spokeswoman for Elan said the firm continued to work on the 20-F and was making progress on the matter.
She said the company had not asked the holders of the EPIL notes for any more than a one-week extension.
The company is known to be in discussions with the SEC over the accounting treatment of one of its off-balance-sheet EPIL vehicles, EPIL III, and a related transaction.
This is thought to be the repayment of $160 million of the EPIL III debt last June.
Mr Peter Frawley, analyst with Merrion Stockbrokers, said it was easy to see how such negotiations could be lengthy, but warned that each new delay on the filing would further damage the credibility of Elan management.
