02
Jan

Melinta Therapeutics Announces Restructuring Support Agreement with its Secured Lenders under its Senior Credit Facility

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Melinta Therapeutics, Inc. (NASDAQ: MLNT) (the “Company” or “Melinta”), a commercial-stage company focused on the development and commercialization of novel antibiotics to treat serious bacterial infections, today announced that it has entered into a Restructuring Support Agreement (the “Agreement”) with the lenders under its senior credit facility, Deerfield Private Design Fund III, L.P. and Deerfield Private Design Fund IV, L.P. (the “Supporting Lenders”). Under the Agreement, the Supporting Lenders would acquire the Company as a going concern by exchanging $140 million of secured claims arising under its senior credit facility for 100 percent of the equity to be issued by the reorganized Company pursuant to a pre-negotiated chapter 11 plan of reorganization. The Agreement will be filed with the Securities and Exchange Commission in a current report on Form 8-K.

To facilitate the Agreement and address its debt and other obligations, Melinta initiated voluntary proceedings under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Court”). The Company intends to operate its business in the normal course while it works to complete the transaction through the Chapter 11 process. In accordance with the Agreement, the Supporting Lenders will consent to the Company’s continued use of its existing cash and cash equivalents, which will provide the Company the liquidity necessary to operate its business in the normal course throughout this process. The Company also has filed customary motions with the Court seeking authorization to continue operating without interruption, including authorization to continue employee wages and benefit programs and pay the prepetition claims of certain critical vendors and honor customer programs in the normal course.

“While we have successfully conserved cash and enhanced revenue over the past several quarters, we nevertheless anticipate challenges in meeting the Company’s obligations, including near-term compliance with certain covenants,” said Jennifer Sanfilippo, interim chief executive officer. “We are confident that this process will secure new ownership of the business with the financial resources to support the Company’s antibiotics portfolio and ensure these potentially life-saving products continue to get to patients in need. We sincerely thank our employees and partners for their commitment to the antibiotics space, our business, and the patients we serve.”

The Company’s Agreement with the Supporting Lenders positions the Company to emerge from Chapter 11 on an expedited basis under new ownership and continue operating as a going concern on sound financial footing. At the same time, the Supporting Lenders’ proposal to acquire the Company remains subject to a Court-supervised competitive process, which could result in higher and better offers. Melinta and its advisors will evaluate competing bids that may be submitted in accordance with court-approved procedures to ensure the Company receives the highest and best offer for its business in connection with the Chapter 11 process. The closing of any transaction will be subject to Bankruptcy Court approval. The Company aims to complete this process by the end of the first quarter of 2020.

Melinta is advised in this transaction by Skadden, Arps, Slate, Meagher & Flom LLP, Jefferies, LLC, Portage Point Partners, LLC, and Cole Scholtz LLP. The Supporting Lenders are advised in this transaction by Sullivan & Cromwell LLP, Houlihan Lokey and Landis Rath & Cobb LLP.

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