Drug firm put on hold as council calls in £2m loan
A phArmAceuticAl company which focuses on making cancerfighting drugs was forced to suspend its shares from trading after it was put into administration by liverpool city council.
redX pharma, which was shortly due to commence the clinical development of two cancer drug programmes, failed to pay back a five-year- old loan worth £2m to the local authority.
it received a formal demand for the repayment of the loan, which has an interest rate of 12pc per annum, after missing its march 31 maturity date. Administrators were subsequently called in after talks to negotiate alternative sources of financing between the two parties broke down.
Among the suggestions by redX was an immediate payment of £1m in return for a short grace period in which to pay the remainder of the loan, but this was rejected by the council.
‘the timing of this action by liverpool city council and its advisers Frp is extremely unfortunate,’ said redX. ‘[the board] 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.’
in a statement, liverpool city council said: ‘redX have shown no willingness to make any repayment of any size during this period - despite it raising substantial funds from shareholders.’
in a broadly flat day for uK markets, the FTSE 100 once again flirted with record highs. it eventually closed up 0.04pc, or 2.81 points, at 7517.71.
the biggest gainer was private equity and venture capital firm 3i, which saw its target price lifted to 975p from 875p by analysts at canaccord Genuity.
the broker praised the firm for ‘another strong set of full-year results’ after it reported a 36pc rise in returns last week for the year ending march 31. Shares rose 3.7pc, or 31p, to 871.5p.
the FTSE 250 hit a record yesterday, rising 0.1pc, or 17.06 points, to 19967.58, just short of the allimportant 20000 barrier.
it was dominated by investment management firm Intermediate
Capital, which hit a high after reporting that profits rose by more than a fifth in the year to march 31. the company manages £20.6bn of assets, investing in private debt, credit and equity. its profits rose to £74m from £61.2m in 2016, while fee income jumped by more than a quarter.
it benefited from increasingly elderly populations in developed nations, as this has led to an increase in pension assets.
On the back of the strong results, intermediate capital raised its final dividend by 23pc to 19.5p per share. Shares soared 14pc, or 113p, to 920p.
Another winner was Grainger, which hit a nine-year high after analysts at Barclays gave the residential landlord a 310p price target. the bank praised Grainger for investing £850m into the private residential sector, which it believes will help to generate more income. Grainger’s shares rose last week after it revealed a 39pc increase in earnings for the six months ended march 31. Yesterday they rose 3pc, or 7.7p, to 269.2p. Foxy Bingo- owner GVC Hold
ings hit a 12-year high after reporting a 13pc lift in daily gaming revenues over the first three months of 2017. the multi-national sports betting and gaming group also runs brands such as casino club, Betboo and Sporting Bet.
Despite seeing momentum continuing into the second quarter so far, GVc warned that conditions could get tougher over the summer in the absence of a major football tournament. Shares leapt 2.2pc, or 17p, to 780p.