Bausch could pledge cash flow from Xifaxan — its major revenue driver— to support the new money, sources said. The Xifaxan drug made up 87% of the company's Q2 24 revenue at Salix Pharmaceuticals, a division that focuses on gastroenterology treatments.

At the same time, the company is reportedly running a sale process for its valuable eyecare unit Bausch + Lomb. This marked a shift from the company’s longstanding pursuit of trying to completely spin off the B+L business in a way that would solely benefit shareholders, namely Carl Icahn, John Paulson, ValueAct Capital, and GoldenTree Asset Management.

Some creditors have long expressed concerns of the viability of the remainco should the spin-off happen. In light of the ongoing sale process of B+L, there is uncertainty over how Bausch would divvy up potential proceeds to appease both creditors and its equity holders while maintaining solvency, sources said.

Advisors to Bausch Health and its creditor groups recently started talks on ways to deleverage and take advantage of the potential sale of Bausch’s 88% stake in B+L. Bausch’s creditor base includes a number of distressed investors who have been clear they’re unwilling to accept large discounts and have been pushing to participate in any out-of-court restructuring with potential equity upside.

Bausch has been exploring options with the help of White & Case, Houlihan Lokey and Jefferies. A creditor group weighted on term loan debt had migrated to Akin Gump, as reported.

The company is set to release Q3 24 earnings after market close on 30 October.

Representatives at Bausch, Houlihan Lokey and White & Case didn’t respond to requests for comment.

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