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AB Science Secures Two-Year Deferral on State-Guaranteed Loan Repayments, Pending EIB Loan Postponement
On June 30, 2025, AB Science announced in a press release via GlobeNewswire that it reached an agreement in principle with its financial creditors to postpone repayment of €3.7 million in bank debt by up to 24 months, with savings to be reinvested in R&D. This agreement is conditional on a 12-month deferral of a €12 million European Investment Bank (EIB) loan, with negotiations ongoing.Link
Restructuring Terms and Conditions
- State-Guaranteed Loans (PGE): For a balance of €3.5 million, principal repayments are frozen from January 1, 2025, to December 31, 2026. Repayments will resume January 1, 2027, with quarterly payments extended from March 31, 2027, to March 31, 2029.Link
- Innovation Loan: For a balance of €0.2 million, principal repayments are paused from January 1, 2025, to September 30, 2025, with quarterly repayments resuming October 1, 2025, and concluding by June 30, 2026.Link
- EIB Loan Condition: The agreement depends on postponing the repayment of a €12 million EIB loan (split into two €6 million tranches, due January 1 and December 31, 2028) by at least 12 months. Discussions with the EIB are underway.Link
- Standstill Agreement: Creditors granted a standstill during negotiations, facilitating the restructuring process.Link
Strategic Impact
- R&D Investment: The deferral will allow AB Science to redirect savings into research and development, supporting its work on protein kinase inhibitors for diseases with high unmet medical needs, such as oncology and neurological disorders.Link
- Financial Stability: The restructuring provides AB Science with improved cash flow management, critical for sustaining operations amid its ongoing conciliation procedure initiated in January 2025.Link
- Market Response: Following the announcement, AB Science’s U.S.-listed shares (ABSCF.PK) surged by 812.70%, while its Euronext Paris shares (AB.PA) rose by 3.99%, reflecting investor optimism.Link
Risks and Considerations
- Risks: The agreement’s implementation hinges on EIB approval for the loan deferral, introducing uncertainty. Additionally, AB Science’s forward-looking statements highlight risks related to product development and regulatory approvals, which could impact financial performance.Link
- Opportunities: Successful deferral of both loans could enhance AB Science’s financial flexibility, allowing continued focus on its lead compound, masitinib, and other pipeline projects. The market’s positive reaction suggests confidence in the company’s strategic direction.Link
Conclusion
AB Science’s agreement to defer €3.7 million in loan repayments by up to two years, pending a 12-month postponement of a €12 million EIB loan, marks a critical step in bolstering its financial position. By channeling savings into R&D, the company aims to advance its innovative therapies while navigating ongoing negotiations with the EIB. The restructuring, if finalized, could strengthen AB Science’s ability to address high-unmet medical needs, though investors should remain cautious of regulatory and execution risks outlined in the company’s forward-looking statements.