Shares in Elan held steady yesterday as investors remained optimistic that the company would file its 2002 annual report with the Securities and Exchange Commission (SEC) by its self-imposed deadline of today.
Elan has missed two previous deadlines for filing last year's accounts as it seeks to reach agreement with the SEC on the appropriate treatment of a number of off-balance sheet vehicles.
The expiry of the last deadline, on July 30th, left it open to the risk of defaulting on some €2 billion of debt, but Elan agreed a waiver with its bondholders until today.
"There is an expectation of good news," one dealer said. "But even if they don't make the filing, they are expected to get a further waiver from the bondholders. The stock is trading on the basis that there will be no default."
In Dublin, the shares closed unchanged at €4.35, while in New York, its main market, they ended down 4 US cents at $5.01.
Even if Elan again fails to file today, analysts believe the holders of $840 million (€736 million) of debt will not demand immediate repayment but will grant it more time to reach agreement with the SEC. Because their debt ranks subordinate to $650 million of senior loans that could also be called in if Elan defaults, it is in the interests of the first set of bondholders to grant the company a further waiver.
However, analysts noted that Elan could leave making an announcement to the last minute.
"If I was a betting man, I'd say they would file at six o'clock," one analyst said.
Meanwhile, a number of former Elan employees in Athlone, Co Westmeath, have set up BioClin Research Laboratories with equity support from Enterprise Ireland.
The project has a total investment of €400,000 and will initially employ 11 people, although employment is expected to grow to 30 in the next three years.
BioClin will provide a range of research and development services for the pharmaceutical, biotechnology, veterinary and neutraceutical industries.
The company is aiming to partner pharmaceutical and biotechnology companies with limited in-house resources in pre-clinical and Phase I study management and analysis.
As part of restructuring, Elan cut 1,000 jobs last year, 300 of which were in the Republic.
