ICP Biotechnology yesterday became the first New Zealand listed company to go into voluntary administration as it opted to take the new route for struggling businesses in a bid to trade its way out of its financial woes.
Chairman Roger Gower said the directors of the start-up business
saw the new legislation, introduced in November, as a way of preserving as much value in the business as possible.
"We see it as a positive move. It's not a decision we have taken lightly."
Gower said the company had been driven to take action after achieving lower sales than expected, particularly in its new proteins business.
The business had also decided not to exercise warrants due in February because of the softness in the markets which had left it short of cash.
ICP Bio signalled its problems at the end of last month and said it was pursuing all funding options.
But Gower said it had been unable to secure funding due to the lack of increased sales and difficult market conditions. He hoped the voluntary administration would provide certainty for a new investor to enable the business to recapitalise.
ICP Bio last traded at 1.5c after slumping from a high of around 20c just over two years ago.
It's income increased 165 per cent to $4.7 million and the loss halved to $3.2 million in the half year to December. The operating loss fell to $2.0 million from $5.1 million.
While equity improved to a $5.1 million credit from an $8.7 million deficit, cashflow deteriorated to negative $8.85 million from negative $5.95 million a year earlier.
ICP Bio's biggest shareholder Viking Capital, which has a 23 per cent stake, also went on a trading halt.
Chief executive Brent King said the freeze seemed like a good use of the new legislation provided it did what it was designed to do. He did not wish to comment further on how the move might affect Viking Capital but said he would be releasing a statement to the stock exchange today. Viking Capital last traded at 14c, down from a year high of 33c.
Gareth Hoole and Kevin Pitfield of Staples Rodway have been appointed to the run ICP Bio.
