Bioniche Discussing Potential Private Placement
- financing could raise between $10 and $17.5 million U.S. -
BELLEVILLE, ON, October 14, 2005 - Bioniche Life Sciences Inc. (TSX: BNC), a research-based, technology-driven Canadian biopharmaceutical company, today announced that it has signed a non-binding term sheet with an institutional investor for a private financing, consisting of a credit facility of $10 million U.S. to be used mostly for working capital and product development with the possibility of a bridging facility of a further $7.5 million U.S.
The working capital credit facility will be convertible, to a maximum of 50%, into Bioniche common equity at a premium to the trading market price at time of funding. This facility will also potentially permit Bioniche to make interest and certain principal payments in common shares over its three-year term.
The bridging facility could be used by Bioniche to assist in the refinancing of its long-term debt. This facility is also convertible into Bioniche common equity at a premium to the market price at time of funding if not repaid within the first 120 days after funding.
The pricing of the conversion rights will be determined at closing. Both financing options are subject to the satisfactory completion of due diligence, final credit approval and definitive documentation, and regulatory approval, and there is no assurance that it will be completed on the terms described herein, or at all.
“Should this financing proceed as envisioned, the proceeds will be used, together with the proceeds from our previously-announced proposed sale of our Pharma division (sterile injectables), to refinance existing debt, provide working capital, and support the continued development of our two leading technologies,” said Mr. Graeme McRae, President & CEO of Bioniche Life Sciences Inc. “These two technologies are Mycobacterial Cell Wall – DNA Complex (MCC), entering a planned multi-centre Phase III/pivotal clinical trial in superficial bladder cancer, and the E. coli O157:H7 cattle vaccine, for which a final regulatory submission to the USDA is expected to occur by early 2006.” The rules of the Toronto Stock Exchange stipulate the need for shareholders to approve the issuance of shares, in excess of 25% of the outstanding shares of that class. Despite not knowing the aggregate number of shares that may be issued in relation to this private placement, Bioniche shareholders will be asked to approve the potential issuance of more than 9 million, to a maximum of 15 million, common shares under these facilities at the upcoming Annual and Special Meeting of Shareholders scheduled for November 3, 2005.
A more detailed summary of the proposed financing terms can be found in Bioniche’s Management Proxy Circular dated October 6, 2005, which is available at www.sedar.com.