Angiotech reaches agreement with Consenting Noteholders to extend deadlines under Recapitalization Support

Dec 20 2010

Angiotech Pharmaceuticals, Inc. (NASDAQ: ANPI; TSX: ANP) ("Angiotech " or the "Company") today announced that it has reached an agreement (the "Second Extension Agreement") with the holders (the "Consenting Noteholders") of a  majority of the outstanding 7.75% Senior Subordinated Notes (the "Subordinated Notes") to extend certain deadlines outlined in the previously announced Recapitalization Support Agreement dated October 29, 2010 and amended on November 29, 2010 (as amended, the "Support Agreement").  Seventy-three percent of the holders of the Subordinated Notes initially executed the Support Agreement and support has increased such that presently 84% of the holders of the Subordinated Notes have agreed to be bound by the Support Agreement.

As described more fully in the press release dated October 29, 2010, under the Support Agreement, the Consenting Noteholders have agreed to exchange their Subordinated Notes for common stock in the Company (the "Exchange Offer").  Qualifying holders of the Subordinated Notes (the "Noteholders") participating in the Exchange Offer would receive their pro rata share of up to 93.5% of the common stock of Angiotech issued and outstanding following the completion of the recapitalization transaction, subject to potential dilution.  The Support Agreement provided that, as a condition precedent to the implementation of the Exchange Offer, Noteholders comprising at least 98% of the outstanding aggregate principal amount of the Subordinated Notes must consent to the Exchange Offer (the "Minimum Exchange Offer Threshold").

Under the Second Extension Agreement, the date by which Angiotech must commence the Exchange Offer or otherwise commence implementation of the recapitalization has been extended to January 11, 2011.  Additionally, the date by which the Minimum Exchange Offer Threshold must be achieved has been extended to February 9, 2011.  All other deadlines in the Initial Support Agreement with respect to the Exchange Offer and the recapitalization have been extended. 

The Company has also entered into an agreement (the "Second FRN Extension Agreement" and, together with the Second Extension Agreement, the "Extension Agreements") with holders (the "FRN Noteholders") of a majority of the Company's existing Senior Floating Rate Notes due 2013 (the "Existing Floating Rate Notes") to extend to January 11, 2011 the date by which Angiotech must commence the exchange offer outlined in the previously announced Floating Rate Note Support Agreement dated October 29, 2010 and amended on November 29, 2010 (as amended, the "FRN Support Agreement"). 

As described more fully in the press release dated October 29, 2010, under the terms of the FRN Support Agreement, Angiotech will offer to exchange Existing Floating Rate Notes for new floating rate notes (the "New Floating Rate Notes").  The exchange offer will be open to all qualifying holders of the Existing Floating Rate Notes. The New Floating Rate Notes will be secured by a second lien over the assets and property of the Company and certain of its subsidiaries and will otherwise be issued on substantially the same terms and conditions as the Existing Floating Rate Notes other than amendments to certain covenants in respect of the incurrence of additional indebtedness, liens and change of control.

The Extension Agreements will be filed by the Company on both SEDAR and EDGAR, and the descriptions of the Extension Agreements contained in this press release are qualified by the full text of the applicable Extension Agreements.