Elan gets fresh reprieve from bondholders

Elan said today its bondholders had agreed to a further, one-week extension for filing its 2002 US accounts as a previous deadline…

Elan said today its bondholders had agreed to a further, one-week extension for filing its 2002 US accounts as a previous deadline was set to expire.

Elan, which risks triggering a run on its debt of more than $2 billion over a technical default relating to the filing of the accounts, said it had until August 15th to file.

The company, which has negotiating with the US Securities and Exchange Commission (SEC) over its accounting policies, was due to file before the end of business today.

"I'm slightly surprised they're not filing today because they were upbeat about it, but they've only extended for a week so we presume they'll be able to file by next Friday," said Mr Peter Frawley, analyst at Dublin-based Merrion Capital. "But it's certainly not good news for Elan," he added.

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Former high-flier Elan, which has been selling off assets as part of a radical recovery plan after its stock plunged, was originally due to file the accounts by July 30th but persuaded holders of its EPIL II and EPIL III notes - worth around $840 million - to give it more time.

Although it has another extension, September 14th remains the final cut-off for Elan as after that date the firm's Senior Notes, worth $640 million, fall due and demands from holders that their loans be paid back would trigger a run on the EPILs and other remaining debt.

Elan has warned that despite cash raised from asset sell-offs, it would be unable to meet all the debt at once and would face collapse.