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ICP Biotechnology has been placed into receivership just one day after its directors sought to rescue the business through voluntary administration.
The listed start-up announced on Wednesday it would pursue the new route for struggling businesses after lower-than-expected sales and a decision not to exercise warrants due in February left it short of cash.
But by lunchtime yesterday receivers KordaMentha had been called in.
Gareth Hoole of voluntary administrators Staples Rodway said as receivership took precedence over administration his position was now something of an academic role.
He estimated the business owed between $11 million and $12 million to secured creditors and a further $6 million to unsecured creditors. It also has about $5.5 million in inventories.
He understood a finance company called Easy Factors had called in the receiver and was the biggest creditor, owed about $5 million. Hoole described the situation as disappointing as he said he had been led to believe the creditors were supportive of the voluntary administration.
Under voluntary administration creditors have 10 days to call in the receiver if they are not happy. But the process is designed so that an initial creditors meeting is held within eight days and a watershed meeting is then held within five weeks to vote on whether a restructure proposal, called a deed of company arrangement, will go ahead.
"It's a little bit disappointing as we hadn't had a chance to deliver a cohesive plan," Hoole said.
He said there were a number of options that the company could have explored but unless the receivers managed to persuade the creditor to pursue the voluntary administration there was little he could do. KordaMentha did not return calls from the Herald yesterday.
ICP Bio chairman Roger Gower said he could not comment on the receivership as the business was in the hands of the voluntary administrator.
ICP Bio's biggest shareholder is listed investment company Viking Capital. It came off a trading halt yesterday which saw its share price fall 4c to 10c.
As well as its 23 per cent stake Viking said it had lent $870,000 to ICP Bio and owns two freeze driers worth $1.3 million which are leased to the firm.
ICP Bio last traded at 1.5c, down from a high of 20c just over two years ago.
According to the Ministry of Economic Development 20 companies have gone into voluntary administration since the legislation was introduced in November and of those three have managed to sign a deed of company arrangement. Nine went into liquidation and a further eight are still in voluntary administration.
