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Listed Dunedin biotechnology company Botry Zen has admitted to defaulting on banking arrangements and has appointed an independent adviser to assess its financial position while seeking a buyer.
Botry Zen chairman Max Shepherd said because of shareholders' rejection last week of Botry Zen's proposed $1.8 million capital raising proposal, the company "is currently operating in excess of its approved overdraft limit with the Bank of New Zealand and is therefore in default of its facility and security arrangements".
PricewaterhouseCoopers were yesterday appointed as an independent adviser to prepare a report on Botry Zen's financial position and options which will then be discussed with Bank of New Zealand, he said.
Botry Zen, which has raised almost $10 million for research and development of its two mainstay grape fungus-fighting products during the past seven years, signalled in early August it was running into problems.
Because of production difficulties at its Dunedin manufacturing plant it had to reassess whether it could meet production targets, which had formed the basis of forecasts to the Bank of New Zealand and subscribers to the would-be $1.8 million capital raising, and also impaired its cash flow.
- OTAGO DAILY TIMES
