FRP Advisory has been called in as administrators to both RedX Pharma plc and its subsidiary RedX Oncology Ltd, after Liverpool City Council called in a £2m loan to the AIM-list company
RedX said it has requested a suspension of trading of its shares on AIM, having been informed administrators have been appointed to the company.
The pharmaceutical specialist said it had failed to reach a settlement with Liverpool City Council (LCC) for a £2m loan made to RedX Oncology Ltd in June 2012, carry accrued interest at 12% per annum.
RedX said it has been in discussions with the council and offered an immediate payment of £1m in exchange for a ‘short grace period’ but this was rejected.
Iain Ross, RedX chairman, said: ‘The board and its advisers felt consistently confident that we could have found the appropriate solution within a short period and can't quite fathom why a creditor with whom we have had a good relationship for over five years is taking such an aggressive stance when they know, and have been provided with the evidence, that the company is making excellent progress on all fronts.
‘The company, which now comprises 84 employees, has two incredibly important state of the art cancer programs, which will shortly commence clinical development in seriously ill patients and both these assets are attracting significant partnering interest from a number of large pharmaceutical companies.
‘Despite this and our assurances to resolve the matter quickly, LCC has refused to meet with me or to have any direct discussion.’
For its part, LCC said it had given RedX a three-year loan in 2012 ‘to support their business expansion plans in the city’ as part of a move to encourage a bio-technology hub.
The council claimed that even though it extended the repayment deadline by two years, Redx ‘have shown no willingness to make any repayment of any size during this period – despite it raising substantial funds from shareholders over the past few years’.
The loan deadline was March 31 and the council says ‘no contact was made by the company’ in the run-up to that deadline.
In its statement, FRP Advisory said the administrators are considering options for the group’ in line with their statutory duties and in the interests of creditors’.
The group's business and assets include a number of specialist oncology drugs at various stages of development, together with related intellectual property, and the administrators said they will be seeking to realise the assets in the interests of creditors.
