Embattled Healthcare Enterprise Group (HCEG) has agreed a debt-for-equity deal with creditors including director and serial investor John Gunn.
Embattled Healthcare Enterprise Group (HCEG) has agreed a debt-for-equity deal with creditors including director and serial investor John Gunn.
HCEG, which pared pre-tax losses from £10.7 million to £1.3 million in the half to December, will pay off its £3.3 million of loan notes with its own shares, as well as the majority of its shares in subsidiaries Ebiox and Reproductive Sciences and its investment in First Aid Holdings. On completion, HCEG will become an investment company.
Warrington-based HCEG’s directors, Gunn and executive deputy chairman Lyndon Gaborit, will own seven per cent and 13.6 per cent of the company respectively as a result of the transaction, and will be joined on the board by former Reckitt Benckiser director and current Ebiox chairman John Honey and finance man Gron Ffoulkes-Davies. Their immediate plan is to raise some working capital through a ‘small’ fundraising or further realisations.
The group’s companies had a mixed first half, with specialist disinfectant arm Ebiox losing £0.1 million on flat sales despite witnessing a surge in demand following the outbreak of swine flu. Reproductive Sciences, which is focused on developing a low-cost intra-uterine sperm pump to help infertile couples conceive, enjoyed success in its clinical trials but will require additional funds to continue its work.
