Elan said today it wanted more time to file its 2002 annual report with US regulators and that the delay could bring it into technical default with some of its bondholders.
The debt-ridden company, which fell heavily from grace last year on concerns over its complex accounts, said it wanted to delay the filing of its annual report because it was still in talks with the US Securities and Exchange Commission (SEC) over the accounting treatment of some special purpose entities.
"Elan is fully cooperating with the SEC and is pursuing all available options for quickly resolving the SEC discussions and for addressing the impact of those discussions on Elan's outstanding debt," president and chief executive Mr Kelly Martin said.
Shares skidded 15 per cent in early London trade, sharply underperforming the broader market.
Elan is saddled with some $2.6 billion in debt and is due to repay a bond of around $800 million by the end of the year. It has been selling off assets to meet its debt obligations.
Elan warned that a failure to resolve its SEC issues in time would lead to defaults on two of its special purpose entities on July 30th, and on its Senior Notes on September 14th, and could result in the debt becoming immediately payable.
This in turn could trigger a "cross-acceleration" of liability on the company's other outstanding debt, it said, including its Liquid Yield Options Notes.
"Elan would not be able to satisfy the acceleration of a significant amount of its outstanding debt," it said.