Troubled Irish pharmaceutical firm Elan Corp has reportedly bought back around $400 million worth of its US bonds at a discount in a move which could ease its financial pressures.
Quoting unnamed market sources, the Sunday Tribunesaid the company, whose shares lost around 95 per cent of their value during 2002, had been buying back bonds since last month at a discount of 20 to 25 per cent.
Analysts have been voicing concerns that Elan was facing a possible $1 billion liability due to a "poison put" option on US bonds issued in 1998 which investors could convert to cash or shares in December.
According to a source quoted by the Sunday Tribune, if Elan could buy back around half the bonds it would significantly ease concerns, allowing the company to issue new shares to meet its remaining commitments to bondholders.
The paper said Elan had not confirmed it was engaged in redeeming bonds. No one from the company was immediately available for comment.
Elan, once the star of the Irish stock exchange with a market capitalisation of more than $20 billion, plummeted to under $1 billion in value last year amid concerns about its accounting practices and a major glitch in tests for an Alzheimer drug.