Bausch pushes debt escape plans to extremes

Bausch Health Companies

19/09/2023 16:13

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Robert Cyran
       NEW YORK, Sept 19 (Reuters Breakingviews) - BHC’s CFO
just quit as the drugmaker mulls a dicey plan to spin off its
$5.5 bln Bausch + Lomb stake. Such engineering increasingly pits
creditors against shareholders, in this case Carl Icahn and John
Paulson. Stronger covenants would help, but CEOs keep getting
more creative
    Full view will be published shortly.
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    CONTEXT NEWS 
Drugmaker Bausch Health Companies said on Sept. 18 that Chief
Financial Officer Tom Vadaketh told the company he would leave
effective Oct. 13 to pursue another opportunity. John Barresi,
Bausch’s chief accounting officer, will serve as interim CFO as
well during the search for a permanent replacement.
    Bausch said on Aug. 3 that it was exploring ways to optimize
the structure of any distribution of its 89% stake in Bausch +
Lomb, a publicly traded eye-care subsidiary.
    While BHC’s initial intent was a so-called plan of
arrangement, which is how Canadian companies typically spin off
subsidiaries, BHC said a “tax-free reduction in capital” may be
optimal under which 80% of shares would be distributed to
shareholders.
  

 (Editing by Jeffrey Goldfarb, Sharon Lam and Aditya Sriwatsav)
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