Rex produce exoskeletons which help wheelchair-bound people walk. Photo / Rex Bionics
Rex produce exoskeletons which help wheelchair-bound people walk. Photo / Rex Bionics
Rex Bionics has been thrown an A$10 million (NZ$10.8m) lifeline by Australian fund manager BioScience Managers in exchange for control of the New Zealand robotics firm listed on the London Stock Exchange's AIM market.
Shareholders will vote later this month on whether to approve a deal that would pour thecompany's business and assets into its Australian subsidiary, which would then sell A$7.5m of shares to BioScience, lifting the fund manager's stake to 64 per cent, Rex said in a notice to the London Stock Exchange. BioScience would also commit to a further investment of A$2.5m if certain targets were met, in a rights issue that the existing Rex investors could participate in.
The second part of the transaction would see Rex sign a two-year development agreement with McLaren Applied Technologies, a unit of the luxury car maker McLaren Group, to design the next phase of the Rex product in an effort to reduce the cost of making the exoskeletons which help wheelchair-bound people walk. McLaren would be issued warrants to help pay for its services, which could dilute existing Rex shareholders down to 29.2 per cent.
In March, Rex said it would probably need external funding to keep operating after struggling to raise capital to pay for a prototype of the new product. The directors yesterday said if the transaction isn't approved the company won't be able to pay its debts and will have to stop operating or kick off an insolvency procedure immediately, which would wipe out shareholders' entire equity investment.
"We are pleased to have signed these agreements which will enable the continued development of the Rex technology," chairman David Macfarlane said. "Rex has made a lot of progress in respect of product quality, clinical data and user satisfaction across a range of neurological conditions, and I warmly thank our shareholders, how have made this possible."
The directors indicated they will vote their shares, representing 3.9 per cent of the company, in favour of the transactions at the meeting to be held on May 22.
The New Zealand Venture Investment Fund, a shareholder in Rex, declined to comment on whether it would support the deal.
Rex has been a beneficiary of Callaghan Innovation funding, receiving research and development grants totalling $2.9m before it listed in 2014 with a condition that production stayed in New Zealand until 2017.
Callaghan chief financial officer Richard Perry said the restructure means the Crown entity will look at whether Rex is still eligible for a grant.
"In general, in these situations, if the company continues to undertake New Zealand-based R&D, and retains benefits to New Zealand, the grant payments can be resumed," Perry said.
