reached an agreement with a syndicate of banks to extend an existing credit facility by two years, provided it can raise $210 million independently.
The agreement with about 50 creditor banks extends the maturity of a $735 million senior credit facility by two years to Jan. 3, 2005. That extension requires that PacifiCare reduce its existing credit facility by $250 million prior to the current maturity of Jan. 3, 2003. The company put up $40 million on Thursday.
The company also said it would take a charge of $897 million, writing off almost half the value of goodwill on its balance sheet. The charge, which is related to new accounting rules, also increases earnings by $56 million, or $1.60 per share, for the full year, as related amortization costs are taken away, the company said.
PacifiCare last week agreed to pay $87 million to settle claims brought by the Justice Department that its HMO plans had inflated claims for insurance payments.
The shares were up 16% to $24.85 on Instinet.