Alpharma To Improve Balance Sheet

Alpharma has taken several actions that it said will significantlyimprove its balance sheet and strengthen its financial flexibility.

It has completed a $180 million revolving bank credit facility. The facility was underwritten by a syndicate of four banks led by the Union of Norway as agent, with Den Norkse Bank, Summit Bank and CoreState Banks completing the syndicate. It replaces $130 million of term debt, which has about three years remaining and an existing $48 million three-year revolving credit facility. The new facility has an initial term of three-and-a-half years, with annual renewal options. Under the terms of the agreement, Alpharma may add new debt equal to two times the amount of any new equity raised, and for every dollar of debt repayment, it can increase its debt capacity by an equal amount.

Additionally, A L Industrier AS, Alpharma's majority shareholder, has completed an already-announced irrevocable subscription agreement to buy 1,273,438 newly-issued shares of the company's class B common stock at $16.34 per share. The total proceeds of $20.8 million will be used to reduce short-term debt, Alpharma said, adding this will enhance its balance sheet by increasing working capital, improve its debt-to-equity ratio, reduce interest expenses, and give it additional borrowing capacity under terms of the new credit facility.