Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) could be about to recycle its debt by issuing new bonds. The Israeli pharmaceutical company yesterday filed a shelf prospectus with the US Securities and Exchange Commission (SEC) to raise up to $5 billion in bonds. The prospectus replaces the former prospectus (an S-3 form instead of an F-3) form after Teva became a US company on January 1 and must comply with US reporting requirements. The new shelf prospectus is a preliminary filing and still does not include specific details about the bond being offered to the public.
Teva's new CEO Kare Schultz recently said that the company would not raise company through shares although in this instance the pharmaceutical company would be raising debt and not capital.
According to the new prospectus, Teva plans using the funds raised for general business needs, which could include working capital, investments, or expanding credit to subsidiaries as well as repaying debt. At the end of the third quarter of 2017, Teva's debt stood at $34.7 billion, an amount expected to have shrunk somewhat by the end of the fourth quarter, which we will see when Teva publishes its financial results at the end of next week. Teva has sold some of its non-core assets in order to reduce the debt.
Teva also announced a streamlining plan in December, which includes 14,000 layoffs worldwide of which 1,700 are in Israel. The plan will help Teva service its debt taken on in 2016 to buy Actavis, the generics division of Allergan, for almost $40 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 30, 2018
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