More twists in Ventracor saga Nick EvansTuesday, 2 June...

More twists in Ventracor saga

Nick Evans
Tuesday, 2 June 2009

WHILE creditors voted for the takeover of Ventracor by Siqro Inc on Friday, the saga does not appear to be over for the Australian heart device company, with the United States buyers yet to come up with bridging finance to close their takeover of the troubled company.



A technician holds a Ventracor device in the cleanroom of the new Chatsworth facility

While the second creditors meeting voted in favour of the sale, the deal is not certain to close, with Siqro – believed to be a holding company for US medical device company Orqis – still to source bridging finance to pay for the company’s operations between now and the expected close of the takeover deal on June 12.

BTN understands that, while the administrators report released to creditors last week showed the US company had at least $US28 million to finance Ventracor’s operations over the next 12 months, negotiations were still ongoing over the weekend regarding the release of bridging finance to fund the Ventracor wages bill for the next fortnight.

Voluntary administrators Ferrier Hodgson are reported to have told the creditors meeting on Friday that the company had only around $500,000 at bank at the end of last week – enough to pay the administrators’ fees, but little else.

As of last night, as BTN understands the situation, Siqro had still not been able to assure Ferrier Hodgson that it had the complete funding package, including bridging finance, in place.

This would be the worst possible outcome for Ventracor staff, in particular, as Siqro had indicated it would retain a substantial proportion of the company’s remaining employees.

One shareholder who attended Friday’s meeting revealed to BTN that administrators told Ventracor staff and shareholders at the creditors meeting that they would have no choice but to send the company into liquidation if agreement on bridging finance was not reached by Monday.

Despite this, BTN understands this did not occur, with Ferrier Hodgsons extending the discussions with Siqro for at least another day.

The news has given shareholder activists some hope that their efforts to keep the company in Australian hands may not yet be dead.

The Save Ventracor shareholders group was forced to withdraw their own proposed Deed of Company Arrangement shortly before Friday’s creditors meeting, after key cornerstone investors withdrew their support for the bid, citing a lack of time to conduct proper due diligence on Ventracor’s books.

BTN understands the group has still not given up hope, and has again surveyed shareholders seeking firm cash commitments to a recapitalisation plan, as well as fielding last-minute offers from new potential cornerstone investors.