UPDATE 5-Valeant seeks more time to file annual report

(Adds analyst comment, updates shares)
By Ankur Banerjee
March 30 (Reuters) - Valeant Pharmaceuticals (NYSE:VRX) International
Inc VRX.TO said on Wednesday it was asking its lenders for
another month to file its annual report, seeking to reduce the
risk of a default on its $30 billion debt if it misses the
current April 29 deadline.
However, Valeant - whose U.S.-listed shares were down 6
percent in afternoon trading - said it still intended to meet
the end-April deadline and was confident about its finances.
Valeant said last week that a board committee probing the
company's ties to specialty drug distributor Philidor had found
accounting problems dating back to December 2014.
On Wednesday, the Canadian drugmaker said the committee had
not found any additional items affecting its financial
statements, but had not finished its review.
"The company is comfortable with its current liquidity
position and cash flow generation for the rest of the year, and
remains well positioned to meet its obligations," Valeant said.
Valeant was originally due to file its annual report by
March 15 but said in February it would not meet that deadline as
a result of the review, which started in late 2015.
"Even if they are confident they are going to file by April
29, they still want to give themselves an extra month of
runway," Justin Forlenza, an analyst at credit research firm
Covenant Review, told Reuters.
An extension to May 31 would also give creditors some
additional comfort in the near-term, Mizuho Securities analyst
Irina Koffler said in a client note.
The longer-term worry, she said, was that Valeant's revenue
base would erode over time while the company allocated all
available cash to debt repayment.
A waiver would need approval from lenders holding more than
50 percent of Valeant's loans in principal amount.
Valeant also said it was seeking to extend the deadline for
filing its first quarter report to July 31 from June 24.
The Laval, Quebec-based company said an amendment to its
credit agreement would restrict its ability to make certain
acquisitions, pay dividends and make other payments until its
financial statements were filed.
The company would also be required to apply substantially
all of its net asset sale proceeds to prepay its term loans.
Valeant said in mid-March that it would talk to its lenders
about a filing extension.
"Investors already have appeared to lose confidence in
Valeant's management team ... the announcement today adds to
this loss of confidence definitely," Zachary Bader, distressed
debt analyst at Reorg Research said in an email.
Valeant, under Chief Executive Michael Pearson (LON:PSON), was an
investor darling for years as it went on an acquisition spree
and delivered double-digit profit growth.
But through Tuesday's close of $28.48, its shares had lost
about 90 percent of their value since August when its aggressive
acquisition strategy and practice of sharply raising drug prices
come under public, political and regulatory scrutiny.
Valeant is also under investigation by the U.S. Congress and
various U.S. government agencies over to its strategy and links
to links to Philidor, which has since shut down.
The company said this month that Pearson would step down
after a successor was found.
TIMELINE-Shakeup at Valeant as longtime CEO Pearson leaving

Valeant graphic http://tmsnrt.rs/1UdPNgW
BREAKINGVIEWS-Valeant's best shot depends on lenders' mercy

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>