The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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I am not familiar with the group structure and how staff are employed but as not all the companies are in administration so it will depend on which company staff are employed by.
That does not help us but perhaps it is a consideration for pharma partners in restructuring support going forward.
The objectives of administration are laid down by statute. In other words the objectives of an administrator are the same irrespective of which party appointed them. The fact that OF appointed them gives OF no advantage in the process.
The first objective of administration is to rescue a company as a going concern so that it may continue to trade. If this proves impossible their objective would then become achieving the best outcome for creditors as a whole. If that can't be achieved their attention would then turn to doing the best for the secured/preferential creditors with others following and shareholders bottom of the pile.
Correction the 2 week period following Adminsitration is fundamental, as after that time the Administrator accepts an employee's ongoing status. It is not as straightforward as I at first thought, for this reason, the Administrators will want to protect the integrity of ongoing science work and therfore retain key workers.
Sang it is a mute point whether Bankruptcy will follow as Administrators, even though they have a duty in 4D's case, to retrieve money loaned by Oxford, they should endeavour to keep the company going. This could involve a sale of what is left, to a 3rd party. In such a situation existing shareholders would be left with nothing.
Administration is an insolvency process.
https://www.irwin-insolvency.co.uk/what-happens-to-employees-when-a-company-goes-into-administration/
AS I understand whilst the company is in Administration, salaried staff who have valid Contracts of employment, will continue to enjoy those terms. They can be made redundant and have statutory rights. Any redundancy must comply with regulations.
If the company goes into insolvency, the situation would be very different, Employees would be discharged immediately without pay. It all depends how much cash is in the Bank.
Not sure how Execs are handled, should hve their salaries suspended as how can they work when Administrators are in control?
Jco the administrators will have to decide which staff will be let go within 2 weeks of going into administration.
After that the remaining staff will be paid salaries even before the creditors although their redundancy payments would be down the scale of company creditors
robins I have never blown hot and cold.
I was accused of deramping when I correctly predicted that listing on Nasdaq by itself was not going to raise the SP.
I also called out blatant rampers that infested the board with nonsense.
I genuinely believed that much of the science seemed to check out and I was extremely optimistic about what the 0518 results would show.
However, I was very clear once I sold why I did and it was for the exact same reasons the company has failed.
Cash was a critical problem and could easily be assessed from the annual report and the reference to the loan restrictions.
Also 0518 was very disappointing in the Part B results. This made it clear to me that Merck weren't going to be impressed.
I honestly think that they will struggle to get much at all for any of it.
Sang you are probably right about OF being flexible re the 5 million. But there has to be some positivity here if we believe the science is promising. **** up yes but you have always blown hot and cold here if I recall.
with the admin in control of the company do the bod and staff still get paid there exorbitant salaries still or would the they be hold like our shares? anyone know ?
Russky it sounds like OF tried to be flexible by reducing the amount to be kept in the custodian account to $5m but 4D couldn't even manage that.
There's absolutely zero point in being positive here.
The directors have no say in what is going on. The administrators are running the company and will be in the process of deciding which staff to keep on, what other costs need to be stopped and they will be investigating the directors to see if they were trading whilst knowing they were insolvent.
Often said of politicians but true here aswell they are either liars or fools.
Having been in the scenario of managing a £6m working capital facility (ok slightly different), I can tell you now that you need to have full awareness of all the moving parts to ensure that you do not breach and if you have are having any difficulties is to be in full dialogue with the lender as early as possible. If you have good dialogue, expedite what you say your are going to do & then you may depending on the lender be able to flex aspects of the agreement via their client manager and hence their risk committee/structures. Along with an Non-Exec we managed to stabilise a basket case of a £35m business & eventually turn the thing around by getting mgmt to do what they should have done all along re-structure..
I hope the administrators will look at raising the titanic here but a re-structure will be demanded as part of the deal.