Pharming Group announces the early redemption of the remaining outstanding €125 million convertible bonds due 2025
Pharming Group has announced the early redemption of the remaining €1.9 million in 3.00% convertible bonds due 2025. Originally, €125 million in bonds were issued, but €123.1 million were repurchased by Pharming on 26 April 2024. The remaining bonds will be redeemed on 18 June 2024 at 100% of their principal amount, with accrued interest paid up to the redemption date. Bondholders have until 7 June 2024 to exercise their conversion rights at a price of €2.0028 per ordinary share. As of the latest trading session, Pharming's stock closed at €0.868.
- Early redemption of €1.9 million out of the original €125 million in bonds indicates strong liquidity.
- Reduction of debt load by repurchasing €123.1 million in bonds previously.
- Full redemption price of 100% assures bondholders of principal recovery.
- Accrued interest is being paid up to the redemption date, benefiting bondholders.
- Current stock price (€0.868) is significantly below the bond conversion price (€2.0028), making conversion less attractive.
- Redemption could indicate potential strain on future cash flows.
Insights
The early redemption of Pharming Group's remaining €125 million convertible bonds due 2025 is a significant financial move. The company's decision to use its clean-up call option highlights its intention to manage its debt more proactively. By redeeming these bonds early, Pharming is effectively reducing its interest expenses, which can positively impact the company's net income in the future.
Furthermore, the redemption at 100% of the principal amount indicates that the company is in a strong financial position to honor its debt obligations. This could increase investor confidence in Pharming's financial stability. However, it's notable that the company's stock price is significantly below the bond conversion price (€0.868 vs. €2.0028), meaning bondholders may be disinclined to convert their bonds into shares, opting instead for redemption.
In the short term, this move may create a slight cash outflow, but the long-term benefits of reduced interest payments and improved balance sheet strength are likely to outweigh these costs. Investors should also note that early redemption of bonds often reflects a strategic effort to streamline liabilities and could signal positive future cash flows and earnings potential.
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF BONDHOLDERS. IF BONDHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD SEEK THEIR OWN FINANCIAL AND LEGAL ADVICE IMMEDIATELY FROM THEIR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL OR LEGAL ADVISER. THIS NOTICE IS NOT FOR DISTRIBUTION IN OR TO ANY PERSON LOCATED IN ANY JURISDICTION WHERE SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW.
Leiden, the Netherlands, 15 May 2024: Pharming Group N.V. ("Pharming" or the "Company") (Euronext Amsterdam: PHARM) announces today that it is exercising its clean-up call option with respect to its outstanding
Currently
The remainder of the 2025 Bonds will be redeemed on 18 June 2024 (the "Redemption Date") at
The holders of the 2025 Bonds may exercise their conversion rights at the latest on 7 June 2024. The conversion price of the 2025 Bonds is
About Pharming Group N.V.
Pharming Group N.V. (EURONEXT Amsterdam: PHARM/Nasdaq: PHAR) is a global biopharmaceutical company dedicated to transforming the lives of patients with rare, debilitating, and life-threatening diseases. Pharming is commercializing and developing an innovative portfolio of protein replacement therapies and precision medicines, including small molecules and biologics that are in clinical development. Pharming is headquartered in Leiden, the Netherlands, and has employees around the globe who serve patients in over 30 markets in North America, Europe, the Middle East, Africa, and Asia-Pacific.
For more information, visit www.pharming.com and find us on LinkedIn.
Forward-looking Statements
This press release may contain forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in these statements. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, “milestones”, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. Examples of forward-looking statements may include statements with respect to timing and progress of Pharming's preclinical studies and clinical trials of its product candidates, Pharming's clinical and commercial prospects, and Pharming's expectations regarding its projected working capital requirements and cash resources, which statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to the scope, progress and expansion of Pharming's clinical trials and ramifications for the cost thereof; and clinical, scientific, regulatory, commercial, competitive and technical developments. In light of these risks and uncertainties, and other risks and uncertainties that are described in Pharming's 2023 Annual Report and the Annual Report on Form 20-F for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission, the events and circumstances discussed in such forward-looking statements may not occur, and Pharming's actual results could differ materially and adversely from those anticipated or implied thereby. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Any forward-looking statements speak only as of the date of this press release and are based on information available to Pharming as of the date of this release. Pharming does not undertake any obligation to publicly update or revise any.
Inside Information
This press release relates to the disclosure of information that qualified, or may have qualified, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
For further public information, contact:
Pharming Group, Leiden, the Netherlands
Michael Levitan, VP Investor Relations & Corporate Communications
T: +1 (908) 705 1696
E: investor@pharming.com
FTI Consulting, London, UK
Victoria Foster Mitchell/Alex Shaw/Amy Byrne
T: +44 203 727 1000
LifeSpring Life Sciences Communication, Amsterdam, the Netherlands
Leon Melens
T: +31 6 53 81 64 27
E: pharming@lifespring.nl
FAQ
What is the redemption date for PHARM's bonds?
What is the conversion price for PHARM's 2025 bonds?
How much of PHARM's 2025 bonds were repurchased in April 2024?
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What happens if PHARM bondholders do not convert their bonds by 7 June 2024?
