Ailing biotechnology company Ventracor has warned it may be forced enter voluntary administration within weeks if it cannot find an investor and put together a deal to sell the company.
The global financial crisis has resulted in a collapse of funding for the life sciences sector. For the past few months, Ventracor has been desperately trying to find an investor, merger partner or even buyer for its business, which makes heart devices.
The company attempted a capital raising in December 2008, but risk-averse investors were simply unwilling to pour any more cash into the business. Now, time is running out.
“The board continues to closely monitor the solvency position of the company,” Ventracor said in a statement released to the Australian Stock Exchange yesterday.
“If an acceptable refinancing cannot be achieved in the next few weeks, the company will have no alternative other than to appoint a voluntary administrator, and this may potentially occur while the company remains in voluntary suspension from trading.”
Compounding Vetractor’s woes is the fact that it was forced to issued an “urgent field safety notice” after problems were discovered with one of its heart implant devices.
The company said it had been in discussions with one party about a potential sale and another party about a debt financing deal.
Ventracor says it does not know whether these discussions will be effected by the safety notice, but it is clear the timing could not be worse.
Chief executive Peter Crosby declined to comment this morning.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
