K V PHARMA CL A (GREY:KVPHQ)

ST. LOUIS, Sept. 16, 2013 /PRNewswire/ -- K-V Pharmaceutical Company ("KV") today announced that its plan of reorganization (the "Plan") has become effective and that it has successfully emerged from chapter 11 with significantly reduced debt and a $375 million recapitalization.

Pursuant to the Plan, investors led by Capital Ventures International, Greywolf Capital, Kingdon Capital and Deutsche Bank (together with Silver Point Finance) and/or affiliates of each of the foregoing have provided the majority of funding of the Company's new $100 million credit facility, and $275 million rights offering and direct purchase of new common shares.

"As KV emerges from chapter 11 today, we are a stronger, better capitalized, and more competitive company with a solid financial foundation for future growth," said Greg Divis, CEO of KV. "We deeply appreciate the support from our new investors and partners as we continue to execute on advancing women's health with our well-established portfolio of FDA-approved medications and focus, first and foremost, on our commitment to patients."

KV's existing senior secured notes will be paid in cash in full in accordance with the terms of the plan and general unsecured creditors will receive a pro rata share of $10.25 million.  KV's existing convertible subordinated noteholders will receive 7% of KV's new common shares plus any shares purchased through the rights offering or direct purchase of shares.  Under the Plan, all existing preferred and common stock has been cancelled.

Willkie Farr & Gallagher LLP served as legal counsel to K-V Pharmaceutical, and Jefferies LLC served as financial advisor.

In our 7/17/2013 email we discussed that after further due diligence, prompted by a correspondence with one of our premium members, we now know why some investors are making a speculative bullish play on K-V Pharmaceuticals (KVPHQ).  We sent members our brief write up, "New Information Sheds Additional Light on K-V Pharmaceuticals Bankruptcy Story" and stated that we would continue to perform more research on the story.  After another week of due diligence, we have provided an update to the KVPHQ story in our new article, “K-V Pharmaceuticals – One of the Best Risk/Reward Scenarios You’ll Come Across”.  We have inserted some new thoughts into our original article that further strengthen the bullish case, and have provided a price target of $5.00 if a new Chapter 11 plan that would preserve equity ownership of the common stockholder becomes a reality.

Please see rest of commentary here.

To be among the first to receive alerts like this, subscribe to our premium service!

Email Alert Chain

Alert Sent to Members on 7/15/2013

K-V Pharmaceuticals (OOTC:KVPHQ) ($0.66) - The Q denotes that the company has filed for Chapter 11 bankruptcy.  K-V Pharmaceutical Company (KVPHQ) operates as a specialty branded pharmaceutical marketing company primarily focused on women’s health care in the United States.

On 8/4/12 the company, along with certain subsidiaries, filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York.  The SEC filings from June and July 2013 clearly state that if the current Chapter 11 reorganization plan is approved then current shareholder equity interests will be canceled.  Despite the obvious facts, many investors have still not grasped the reality of the KVPHQ story.  We believe that investors are having a difficult time sifting through the numerous exhibits in the SEC filings that discuss this topic. The most recent SEC filing from July 12, 2013 spells out the following:

• 1. Equity interest of current shareholders will be canceled
• 2. New shares will be issued to a group of investors and Deutsche Bank Securities who are expected to provide $275 million in financing upon the confirmation of the current reorganization plan.
• 3. New shares will be issued to Deutsche Bank Securities who currently owns convertible stock from a 2003 financing transaction.

Investors that want to participate in this trade must realize that it is a high risk one, since the confusion over how the Chapter 11 process works can cause related shares to pump much higher before they become worthless.  We are short KVPHQ.

Alert Sent to Members on 7/17/2013

In our 7/15/13 email we discussed the K-V Pharmaceuticals (OOTC:KVPHQ) ($0.49) Chapter 11 bankruptcy case.  Specifically, we questioned why shares have been strong in recent trading sessions.  SEC filings clearly state that if the company emerges from Chapter 11 under the proposed reorganization plan that ownership interest of shareholders who own the current stock will be canceled and new stock will be issued to a group of investors.  This investment group includes Deutsche Bank Securities, who will in total provide $275 million in financing. After further due diligence, prompted by a correspondence with one of our premium members, we now know why some investors are making a speculative bullish play on the stock.  While we continue to perform more research, here is a brief snapshot of the bullish view on this topic.

Please see rest of commentary here.

Alert Sent to Members on 7/23/2013

In our 7/17/13 email we issued an update on the K-V Pharmaceuticals (OOTC:KVPHQ) ($0.18) story.  In our article, we stated that new information had shed some light on the K-V bankruptcy.  While we originally went short the stock on 7/15/13, our 7/17/13 update introduced a possible bullish thesis.  As we stated in our report, this was a high risk/reward play.  With the recent decline in share price we believe that the risk/reward is even more favorable now.  We are still long a small speculative position and look to add to our position at these levels.

Alert Sent to Members on 7/26/2013

K-V Pharmaceuticals (OOTC:KVPHQ) ($0.44) - In our 7/17/13 email we provided an update to the KVPHQ story.  Our article, "New Information Sheds Additional Light on K-V Pharmaceuticals Bankruptcy Story" gives details of the bullish case for KV.  In our 7/23/13 email we mentioned that with the recent drop in price, we felt the risk/reward was even more favorable and that we were adding to our long position at around $0.20.  The stock showed strength yesterday, closing at high of day $0.44.  We have continued to add to our long position.

To be among the first to receive alerts like this, subscribe to our premium service!

In our 7/15/13 email we discussed the K-V Pharmaceuticals (OOTC:KVPHQ) ($0.49) Chapter 11 bankruptcy case.  Specifically, we questioned why shares have been strong in recent trading sessions.  SEC filings clearly state that if the company emerges from Chapter 11 under the proposed reorganization plan that ownership interest of shareholders who own the current stock will be canceled and new stock will be issued to a group of investors.  This investment group includes Deutsche Bank Securities, who will in total provide $275 million in financing. After further due diligence, prompted by a correspondence with one of our premium members, we now know why some investors are making a speculative bullish play on the stock.  While we continue to perform more research, here is a brief snapshot of the bullish view on this topic.

Please see rest of commentary here.

To be among the first to receive alerts like this, subscribe to our premium service!