Valencia-based biopharmaceutical company MannKind Corporation plans reduce its loan debt by selling up to 18.2 million of shares of common stock to a private investment group and a matching number of shares to The Mann Group LLC, the company announced. Through the agreement, the Valencia-based company will sell 700,000 shares of common stock to Seaside 88 every two weeks until the full amount is reached. The initial sale of shares is expected to close on Sept. 22. The Mann Group LLC, an entity controlled by MannKind’s CEO and principal stockholder, Alfred Mann, has agreed to purchase the same number of shares sold to Seaside 88. The purchase by The Mann Group will be paid by cancellation of principal indebtedness under MannKind’s existing revolving loan arrangement with The Mann Group. The arrangement is expected to reduce the biopharmaceutical company’s debt to The Mann Group by at least $130 million after the 26 sales occur. Seaside 88 will receive a per share purchase price at an 8 percent discount to the volume weighted average trading price of MannKind’s common stock for the 10 consecutive trading days immediately preceding each closing date. For any closing to occur, the weighted average trading price must be at least $6.50 per share. The Mann Group will purchase the shares at an undiscounted closing bid price on the trading day immediately preceding the applicable closing date. The price will not be less than $7.15. On July 31, the outstanding principal amount under the loan arrangement was $252 million, leaving MannKind Corporation with $98 million remaining of available borrowings. Jessica Selva
