Mallinckrodt (MNK) – Get Report, which makes opioids and other drugs, is reportedly close to a deal to hand majority ownership to its unsecured-bond holders as part of a bankruptcy filing.
Shares of the U.K. biopharmaceutical company at last check were off 19% at 88 cents.
The bonds would be traded for most of Mallinckrodt’s equity and some new debt, and the debt of higher-ranked lenders would be reinstated or replaced by new securities that fully cover their claims, Bloomberg reported, citing people with knowledge of the plan.
The lenders and opioid claimants would be included in the agreement, the people said. Mallinckrodt did not immediately respond to a request for comment.
Debtwire reported earlier on negotiations to give the bondholders equity and new debt. Most of the company’s unsecured debt trades at about a quarter of its original value.
Mallinckrodt would become the third major opioid