from the australian

Ventracor after $10m life support

CITY BEAT: Rebecca Urban | December 02, 2008

FLOUNDERING medical device maker Ventracor has given its investors a doozey of a choice: cough up or we go under.

Speaking at the annual meeting, chairman John Ward has warned that the company will have no choice but to put itself into voluntary administration unless a $10 million fund raising is successful.

"We are faced with the very real risk that the company will not have the capital to survive to deliver the returns that you, as shareholders, are entitled to expect," he said. "That is why we are asking you to help the company remain viable by participating in the share purchase plan."

Unfortunately for the former darling of the biotech sector, the share purchase plan has been priced at 8.1c, whereas Ventracor shares, which are down 85 per cent on a year ago, are now trading below that at 7.8c.

Besides, investors have already plunged about $80 million into the company over the past two years.

The fund raising is a last resort for the company, whose plans to raise money in the US this year faltered several times. It has about five months left before it runs out of cash.

"We have done what we can, as a company, to reduce our costs and our capital needs to zero," Ward said. "But we cannot get our capital needs to zero."

But it seems that some investors believe that the company should try a little harder, starting with the salaries of its senior executives.

Head honcho Peter Crosby was paid $1.4 million last year, half of which was linked to performance.

Almost 30 per cent of proxy votes recorded at the annual meeting on Friday opposed the adoption of the remuneration report.


http://www.theaustralian.news.com.au/business/story/0,28124,24735935-30538,00.html