* Says recapitalization deal to cut debt by $250 mln
* Deal supported by majority of subordinated noteholders
* Lines up $25 mln DIP loan
* Existing shareholders to be wiped out
(Adds details of settlement with former stockholders of Quill
Jan 28 Angiotech Pharmaceuticals Inc ANP.TO
said it will file for bankruptcy protection under Canada's
Companies' Creditors Arrangement Act to cut $250 million of its
All of the company's existing shareholders will be wiped
out without any compensation under a proposed recapitalization
deal. The transaction is supported by noteholders representing
more than 84 percent of the outstanding subordinated notes.
The Vancouver-based company, a specialty pharmaceutical and
medical device maker, has been hit hard by declining sales of
its Taxus coronary stent systems.
Angiotech has also lined up a $25 million
debtor-in-possession loan from Wells Fargo Capital Finance LLC
to continue operations while under creditor protection.
Under the proposed plan, noteholders will exchange their
subordinated notes for a share in 96 percent of the reorganized
company's common stock, Angiotech said in a statement.
The company has also agreed to pay $6 million to former
shareholders of Quill Medical Inc to settle a lawsuit filed
The lawsuit alleged that Angiotech, which acquired Quill
Medical in 2006, misrepresented or made omissions during
negotiations for the merger.
(Reporting by Santosh Nadgir in Bangalore; Editing by Sriraj
Kalluvila and Gopakumar Warrier)