Redx Pharma, one of the major hopes of the North West’s science sector, is on the ropes after Liverpool City Council called in administrators.
The council has acted following the maturation of a £2m loan it provided five years ago. Following a two-year extension of what had initially been a three-year loan, repayment was due at the end of March.
The council said that Redx had “shown no willingness to make any repayment of any size during this period – despite it raising substantial funds from shareholders over the past few years.
“No contact was made by the company to Liverpool City Council in the run up to the maturity of the loan and the council was forced to make formal demand of the debt on the company. This demand was not satisfied, leaving the council with no option than to appoint administrators.”
City mayor Joe Anderson said: “This is a highly regrettable situation but Redx have been given more than two years to put their house in order and establish a way to repay this investment loan. Even at the 11th hour the city council was willing to work on a repayment schedule but it is now clear Redx has no intention to work with us in any meaningful way.
“This investment loan was given in good faith and we have a duty to the public to ensure their money, especially during such financial difficulties, is protected.”
Redx relocated fully from Liverpool to Manchester Science Partnerships’ Alderley Park in 2016, bringing its three subsidiary businesses together in a 74,000 sq ft facility.
The business has two cancer treatment programmes due to go into clinical development soon. Despite raising tens of millions through share placings since floating on AIM in 2015, the business continues to be loss-making and announced job losses in March.
Redx claims it has been trying to deal with the council. Iain Ross, recently appointed chairman, said: “The timing of this action by LCC and its advisers FRP is extremely unfortunate and quite baffling considering our efforts to have face- to-face discussions, including earlier today, the immediate offer of a payment plan and our latest proposal to make an immediate £1m payment in return for a short grace period.
“The board and its advisers felt consistently confident that we could have found the appropriate solution within a short period and can’t quite fathom why a creditor with whom we have had a good relationship for over five years is taking such an aggressive stance.”
Ross added: “Despite our assurances to resolve the matter in seven days, LCC has refused to meet with me or to have any direct discussion. I remain confident that given the time requested we could reach a speedy and amicable resolution.”
A council spokesman told Place North West this morning that Redx’s readiness to speak with the council has come too late, and that “this is not a decision taken lightly”.