Ex-Ventracor boss may returnFont Size: Decrease Increase Print...

Ex-Ventracor boss may returnFont Size: Decrease Increase Print Page: Print Rebecca Urban | March 21, 2009
Article from: The Australian
A FORMER boss of collapsed medical device maker Ventracor is considering a comeback to lead an attempted turnaround plan.

Michael Spooner, who was unexpectedly axed from his role in 2003, has confirmed that a group of shareholders have approached him to return to the company, which was placed into administration this week.

"It is something that I would certainly consider," Mr Spooner, currently a non-executive director at several health companies, told The Weekend Australian.

"I have been asked whether I would be in a position to pull together a team ... it's clear that the existing board and management have thrown their hands in the air."

Mr Spooner said a proposal for recapitalising the company, which would include putting a new board and management team in place, would be presented to the administrators.

The plan, while still in the early stage, might be the only hope that shareholders have of seeing any return, given the company failed to attract a buyer for its VentrAssist heart pump despite canvassing more than 50 parties.

Independent healthcare industry analyst David Blake said Ventracor would be lucky to secure a token bid, even though the VentrAssist had been proven in more than 400 patients.

It has marketing approval in Europe and Australia and was close to filing for pre-marketing approval in the US.

"They might be lucky to get $1 for the whole company," Mr Blake said, adding that few companies would be interested in buying such a highly specialised technology with significant capital requirements and an ongoing commitment to provide technical support for existing patients.

Administrators Steven Sherman and John Gothard of Ferrier Hodgson yesterday met with staff at Ventracor's office in Sydney. Ventracor chief Peter Crosby was also at the meeting.


"The administrators are currently undertaking an analysis of the company and its operations to determine the appropriate strategy for the company's future," the insolvency firm said.

The administration of Ventracor is unusual in that, apart from money owed to trade creditors and staff entitlements, it has no debts. Nor is it insolvent, according to Ventracor chairman John Ward.

The company had $9.3 million in cash at the end of December, which, based on last year's cash-burn of $46 million, would have lasted until the end of March.

However, insiders believe that it might have up to $7 million remaining as expenses had recently been slashed.

Shareholders watched the stock fall 90 per cent last year as the Ventracor board, which includes embattled Babcock & Brown chairman Elizabeth Nosworthy, turned down numerous capital-raising proposals after disagreeing with potential investors on value.

The same year top executives shared in more than $4.8 million pay, including $1.4 million in cash bonuses and performance shares.

During Mr Spooner's time at the company, its market capitalisation grew from $15 million to almost $440 million. He has a strong track record dealing with the capital markets. Weeks before his contract was terminated early, Ventracor was trumpeting the fact that he'd raised more than $70 million.

Mr Spooner said the chances of reviving Ventracor would not be known until the administrators provided a report: "We don't really know what state the company is in".