Elan's bondholders have granted the company a new one-week reprieve after it missed a sixth deadline for filing its 2002 accounts with the US Securities & Exchange Commission (SEC).
Elan had been due to file the accounts yesterday and risked defaulting on debt worth up to $2 billion when it failed to do so. In a statement issued yesterday morning, the company said the holders of $840 million (€765 million) of its EPIL debt had granted a new one-week waiver on the filing.
The EPIL-holders, who should have received audited accounts from Elan at the end of June, did not charge the company a fee in connection with the latest waiver.
Elan said it was working with its auditor, KPMG, on concluding "audit-related issues and matters" on the 20-F filing so that the process could be brought to a close. A similar statement was made when Elan last missed a filing deadline a week ago.
A spokeswoman for the company said progress had been made with KPMG over the interval.
The latest extension will expire on September 5th, thus bringing Elan dangerously close to the key date of September 14th, when the holders of senior notes worth $650 million could call in their debt if the 20-F has not been filed. This would activate other calls on Elan's cash reserves and jeopardise the company's continued existence.
Next week's deadline offers the company just four working days to solve the filing issue, since Monday is a holiday in the US. Analysts suggested the short time-frame could put pressure on Elan to engage with the holders of the senior Athena debt.
The company's spokeswoman was unable to comment on how much contact had been made with the Athena holders. "If they gave us a ring, we'd speak to them just as we would speak to any of our stakeholders," she said.
While the identity of Elan's debt-holders is not known, it is thought they are likely to be based in the US.
The market offered a muted reaction to the latest delay yesterday. Elan shares closed 10 cents lower at €3.90 in Dublin but were up 11 US cent at $4.36 in New York.
If Elan manages to close the current chapter without significant financial injury, it is likely that investors' attention will once again turn to the company's development pipeline.
Meanwhile, Elan said it had won approval from the US Food and Drug Administration to market lower-dosage strengths of its epilepsy drug, Zonegran.
The development is viewed as a positive for Elan, since it will allow doctors to prescribe the drug more widely and could boost company revenues.
The firm also said it had transferred production of the drug to Athlone, Co Westmeath. The spokeswoman could not comment on how the move would affect staff numbers at the facility.
