Shares in SkyePharma have collapsed again after the firm’s refinancing plans were unveiled but failed to impress investors.

The drug delivery specialist company has set out the details of its offer to change the terms and conditions on two convertible bonds to holders, an eagerly-awaited deal that had seen SkyePharma’s share price soar before it was announced. However the stock fell 34% to below four pence when the firm said it is also raising £18.4 million through a placing of new shares.

The convertible bonds renegotiation is absolutely vital for SkyePharma’s future as holders of the bonds could demand repayment of £69.6 million in May next year and a further £20 million in June 2010, which would leave the firm crippled financially. However this crisis would appear to have been averted.

SkyePharma now says that 70% and 100% of the holders of its 2024 and 2025 convertible bonds, respectively, have agreed to proposed changes to the conversion price and dates for put options. The 2024 convertible's conversion price will be raised to 371 pence per share from 95 pence, and the first ‘put’ date will be put back to 2013 from 2009.

As for 2025 bond, the conversion price will be raised to 382 pence per share from 58 pence, and the first put date will be put back to 2014 from 2010. A meeting with the bondholders will take place on September 25.

Then SkyePharma said it would sell 1.4 billion new shares at 1.5 pence in an underwritten placing and open offer. Chief executive Ken Cunningham said the deals complete the corporate refinancing of the firm which began shortly after the new team joined in 2006.

He added that we are “grateful to our existing investors for their patience and support during this period, as well as to new investors for their participation” in the fundraising. SkyePharma is “now in a position to move forward and create value for shareholders”, Mr Cunningham went on, now that the firm’s flagship asthma combination drug Flutiform (fluticasone and formoterol) is close to filing in both the USA and Europe.