Irish pharmaceutical firm Elan won permission from its shareholders today to raise money by issuing new equity but said it would try not to do so in current depressed markets.
Elan, a former high flier whose stock collapsed last yearamid concerns over its book-keeping and massive debts, said an extraordinary general meeting of investors had given it the go-ahead to issue up to 120 million new shares, or about a third of its existing share capital.
A similar motion to issue up to 200 million shares wasturned down by shareholders last year.
"Other things being equal, we do not anticipate issuingshares at these prices," Elan Chairman Mr Garo Armen told a news conference. "However, it would be prudent for us to have this flexibility," he said.
At noon today Elan shares, which plunged from as high as €76.35 in June 2001 to as low as €1.1 in July 2002, werelittle changed at €2.6, valuing the business around €869million.
Elan said in January it had reached its target of raising$1.5 billion from asset disposals to pay off a chunk of itsdebts, and would probably sell further assets worth up to $600 million by mid-2003.
Yesterday, Elan said it would sue King Pharmaceuticalsto stop the US firm from backing out of its agreement to pay$850 million for US rights to two Elan medicines.
King said last week it was reviewing the deal after the USFederal Trade Commission disclosed it was investigating whether Elan unfairly blocked generic competition for one of the drugs, muscle-relaxant Skelaxin.