Melinta Therapeutics Inc (NASDAQ: MLNT) was one of the biggest losers in yesterday’s trading session. This came after the company announced that, it had filed for chapter 11 bankruptcy protection. It announced that under its senior credit facility, named the Deerfield Private Design Fund III, and L.P and Deerfield Private Design Fund IV, L.P, it had entered into a restructuring support agreement with lenders.
Through this agreement, the company’s supporting lenders would take over the company as a going concern. This will see them exchange $140 million of secured loans for 100% equity that will be issued by the newly restructured organization. The agreement between the company and lenders will be filed with the SEC on Form 8-K.
For the agreement to take place, the company started voluntary chapter 11 bankruptcy as stipulated in the U.S Bankruptcy Code, in the Bankruptcy Court for the District of Delaware. The company further announced that it plans to keep carrying out its day-to-day business operations, while at the same time following up on the chapter 11 bankruptcy proceedings.
The company also announced that, under the agreement, the lenders had allowed it to utilize its existing cash and cash equivalents as liquidity to continue with its normal operations, all through the bankruptcy process. On top of that, the company announced that, it had filed a customary motion in court. This would give it the space to continue with its operations uninterrupted. This would see the company continue with its wages and benefits programs, and also continue with payments to some of its most critical vendors.
Speaking on the issue, the company’s interim CEO, Jennifer Sanfilippo stated that, they were successful in conserving cash and increase revenues over the last couple of quarters. She also added that, the company was confident that the new ownership would support its antibiotics portfolio.
Looking at its price action, the company opened yesterday’s session with a gap down and closed at $0.62. Volumes in the day stood at 3.78 million.
About Melinta Therapeutics Inc
Melinta Therapeutics Inc is a biopharma company that develops and sells treatments for bacterial infectious diseases. It is based in Morristown, New Jersey.