DEAL: Redx Pharma’s corporate rescue

Author: Amélie Labbé | Published: 10 Nov 2017

Redx Pharma’s transition from administration back to trading on AIM is an unprecedented move for a UK company.

The UK-based drug R&D company was declared insolvent in May after missing a repayment deadline for a £2 million ($2.62 million) secured loan from Liverpool City Council dating from 2012.

It was put into the care of joint administrators FRP Advisory shortly after, and sold off one of its units to US pharmaceutical company Loxo for $40 million to clear its liabilities. Its shares resumed trading on AIM’s junior market on November 6.

Unusual rescue

It’s unusual for a company that enters administration proceedings to emerge relatively unscathed from them: as a matter of principle, most companies are generally insolvent to the point where they will eventually have to fold. Challenges for publicly listed companies are greater.

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