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UPDATE 2-MannKind to sell 36.4 mln shrs to raise cash, cut debt
August 11, 2010 / 12:30 PM / 7 years ago

UPDATE 2-MannKind to sell 36.4 mln shrs to raise cash, cut debt

* To sell 18.2 mln shares to Seaside 88

* To sell 18.2 mln shares to Mann Group

* MannKind expects to repay $130 mln debt through deal

* Shares down 4 pct (Adds details, updates share movement)

Aug 11 (Reuters) - MannKind Corp (MNKD.O), which is awaiting a regulatory decision on its inhaled insulin product, said it entered into two agreements to sell up to 36.4 million of its common shares, to raise cash and pay down debt.

MannKind, which had about 113.8 million outstanding shares, is seeking Food and Drug Administration clearance to sell Afrezza, a drug-device combination insulin therapy being developed for the treatment of diabetes.

The FDA has set Dec. 29 as the review date for Afrezza.

One deal, sees the company selling up to 18.2 million shares for cash to Seaside 88, a private investment limited partnership, over the course of a year.

Seaside will be able to purchase 700,000 MannKind shares every two weeks over the course of a year at an 8 percent discount to their 10-day moving average trading price, which must be at least $6.50 per share.

Concurrently, Mann Group LLC, an entity controlled by MannKind’s Chief Executive Alfred Mann, will also buy 700,000 MannKind shares every two weeks, for a total of 18.2 million shares over a one-year period at a minimum of $7.15 a share.

The Mann sale will be in exchange for the reduction in about $130 million in MannKind debt held by the group, an entity controlled by MannKind’s Chief Executive Alfred Mann.

The CEO already owns about 42 percent of the company’s outstanding shares.

The company, which had $30.8 million in cash, cash equivalents and marketable securities as of June 30, 2010, expects to close the initial sales of 700,000 shares each on Sept 22.

Shares of the company were down 4 percent at $6.83 Wednesday morning on Nasdaq. (Reporting by Anand Basu in Bangalore; Editing by Jarshad Kakkrakandy)

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