FRP Advisory, the administrator of Redx Pharma PLC (LON:REDX), revealed today it had contemplated a fund raise to pay off the Liverpool Council even though the firm was in administration and suspended on AIM.
As there was no precedent for the raising of funds on AIM by a company in administration, this required detailed analysis of the legal structuring and in-depth discussions with the biotech's brokers and advisers, FRP Advisory added.
In the event, one large shareholder vetoed the plan and subsequently FRP Advisory sold one of Redx's divisions, its BTK inhibitors business, to US firm Loxo for US$40mln.
That money has now been received and FRP has confirmed that all creditors of the company will be paid in full.
That includes Liverpool City Council (LCC), which called in FRP Advisory when a £2mln loan that was made to RedX Oncology, a subsidiary of Redx, fell due.
Next steps are for the administrators to be satisfied that Redx can continue as a going concern, following which control will be handed back to the directors who are expected at that point to apply for trading on AIM to resume again.
The process is expected to be take up to 12 weeks.