from the australian

Elizabeth Nosworthy close to a third crash

CITY BEAT: Rebecca Urban | November 28, 2008
Article from: The Australian

COULD Elizabeth Nosworthy be headed for a hat-trick?

The seemingly cursed company director has already presided over the collapse of technology provider Commander Communications. And Babcock & Brown, the broken investment house she chairs, is at the mercy of its bankers. Now, the once lauded heart device maker Ventracor, where she serves as a non-executive director, is running scarily close to running out of cash.

Nosworthy and her colleagues are in for an interesting day, as they front Ventracor shareholders at the company's annual meeting at Brisbane's Hilton Hotel this morning. Questions that might arise include: how much longer until the company, which had $11 million in the bank at the end of October, runs out of cash? Why has the company left it to the last minute to raise capital? And, if the company is unable to raise the $10 million it needs to fund its operations until the end of the financial year, what is plan B?

While Ventracor has no debt and brings in some revenue, it burns about $28 million each year. Based on historical spending, the company will run out of money in about five months.

An attempt to attract debt funding in the US appears to have fallen by the wayside, and the company was recently forced to announce a cost-cutting plan that would allow it to get by by raising $10 million -- compared with a previously stated $18 million to $22 million -- to meet its funding requirements to June 30.

A share purchase plan (SPP) inviting existing shareholders to subscribe for $5000 worth of stock was due to close on December 2 but has been extended for a week. It could prove tough given Ventracor's share price has fallen 85 per cent over the past 12 months.

In recent days shares have traded below 8.1c -- the issue price for the capital raising -- but rebounded to that level on significantly higher than average trading volumes yesterday.

Independent healthcare industry analyst David Blake has described Ventracor's position as "precarious". He believes the company should have attended to its funding position six months ago.

http://www.theaustralian.news.com.au/busin...5016575,00.html