Aug 21 2010
Warner Chilcott plc (Nasdaq: WCRX) today announced that it has completed an amendment to its existing senior secured credit facilities, pursuant to which it has incurred an additional $1.5 billion aggregate principal amount of new term loans. The new term loan facilities are comprised of a $480 million Term Loan A bearing interest at LIBOR plus 4.25% with a four-year maturity, and a $1.02 billion Term Loan B bearing interest at LIBOR plus 4.25% with a LIBOR floor of 2.25% and a five-and-a-half-year maturity. In connection with the amendment, the rates on the existing Term Loans A and B were increased by 0.5% and will now bear interest at LIBOR plus 3.75% and LIBOR plus 4.00% respectively, both with a LIBOR floor of 2.25%. As previously announced, the Company intends to use the proceeds from the new term loans and its $750 million offering of 7 3/4% senior notes due 2018, which also closed today, to fund a special cash dividend to its shareholders of $8.50 per share, or approximately $2.14 billion in the aggregate, and to pay related fees and expenses.
As a result of closing the amendment, the related borrowings and the issuance of the senior notes, Warner Chilcott's board of directors has today declared a special cash dividend of $8.50 per share. The special cash dividend is payable to shareholders of record on August 30, 2010 and will be paid on September 8, 2010. Pursuant to the rules of The NASDAQ Stock Market, when a dividend is declared in a per share amount that exceeds 25% of a company's stock price, the date on which that company's shares will begin to trade without the dividend, or ex-dividend, is the first business day following the payable date. The Company understands from NASDAQ that, because the $8.50 per share special cash dividend is expected to exceed 25% of the Company's share price, it will apply this rule and the ex-dividend date will be set by NASDAQ as September 9, 2010, the first business day following the payable date for the special cash dividend. The Company understands that this will mean that trades in its ordinary shares entered into after the record date and before September 9, 2010 (the "due bill period") will have a due bill attached for the special cash dividend payable on September 8, 2010. Shareholders who purchase these securities during the due bill period (even if the trade will settle after that due bill period) are entitled to receive the special cash dividend, and sellers who sell the securities during the due bill period (even if the trade will settle after the due bill period) are not entitled to the special cash dividend. Investors who enter into trades to purchase ordinary shares on or after September 9, 2010 will not be entitled to the special cash dividend payable on September 8, 2010.
Financial Guidance
The Company is also affirming its previously issued full-year 2010 guidance for adjusted total revenue, adjusted gross margin, SG&A expense, R&D expense and income taxes, while modifying its projections for adjusted net income, adjusted cash net income ("CNI") and adjusted CNI per share as a result of successfully completing the debt financing for its leveraged recapitalization. The Company now estimates that its full-year 2010 adjusted CNI will be reduced by $0.20 per share due to the recapitalization (compared to a prior estimate of $0.20 to $0.25 per share), from a range of $3.45 to $3.55 per share to a range of $3.25 to $3.35 per share. For the full-year 2011, Warner Chilcott now estimates that its adjusted CNI will be reduced by $0.60 to $0.65 per share due to the recapitalization, compared to its prior guidance of $0.65 to $0.70 per share.
These anticipated reductions of adjusted cash net income per share result from the estimated increased after tax cash interest expense associated with the issuance of $2.25 billion of additional debt and the repricing impact of the Company's outstanding term loans. The expected impact on adjusted CNI per share is based on 255 million fully-diluted shares outstanding. Please refer to the attached exhibit for full details of the Company's 2010 revised financial guidance.
For information regarding the tax treatment of the special cash dividend, including potential Irish dividend withholding taxes, please refer to the sections entitled "Material Tax Considerations" in the Company's Prospectus Supplement filed with the Securities and Exchange Commission on November 23, 2009 and the Company's Proxy Statement for its 2009 Annual General Meeting of Shareholders, as well as the Frequently Asked Questions section of the Company's website at www.wcrx.com.
SOURCE Warner Chilcott plc