- The Endo International (ENDP) stock rallied 5.15% as the litigation ends.
- The company filed for chapter 11 bankruptcy protection last week.
- It reached a deal with its creditors, valuing it at $6 billion and erasing its debt.
The Endo International PLC (NASDAQ: ENDP) stock price rallied 5.15% during premarket trading as investors cheered the pause in the state of Pennsylvania’s opioid pandemic lawsuit against the company after it filed for chapter 11 bankruptcy protection on August 15, 2022.
The case brought by Pennsylvania against Endo and three other companies was paused to allow time for the defence counsels to sever Edno from the litigation after it reached a deal with multiple state and local governments to pay $450 million in damages for its part in the opioid pandemic.
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The company has reached a sale agreement with a group of its creditors worth approximately $6 billion, including the settlement of the opioid-related cases brought against it by multiple state and local governments.
The deal will also see Endo set aside a trust worth $550 million to pay off specific future claims related to the opioid pandemic over the next ten years. However, the “stalking horse” deal is not yet final and could be upended by parties that offer much better terms or a higher consideration.
Endo’s CEO and President, Blaise Coleman, was overjoyed, stating that the deal definitively resolves the over $8 billion in debt that the company held on its books, given that its current market capitalization is a mere $77.6 million.
The company’s stock price has been in freefall since November 2021, when it was trading at $7.00, to its current price of $0.33. The deal with its creditors allowed the firm to use its cash collateral to fund its day-day activities, keeping it afloat until the bid is finalized.
Its been a rough ride for Endo shareholders ever since the opioid litigation emerged, but now there is an end in sight that will see the company emerge stronger out of the bankruptcy proceedings.
However, we’ll have to wait and see if the new owners will delist the company or if they will maintain its NAsdsq listing. Given its current market value, delisting Endo from the Nasdaq may be the better option.
*This is not investment advice. Always do your due diligence before making investment decisions.
Endo International stock price.
The Endo International Stock price was up 5.15% to trade at 40.3470, rising from Monday’s closing price of $0.3300.