Co-founder Barry Muncaster has expressed an interest in buying Cambridge Science Park company BioProgress out of the administration of its stricken parent, Meldex International.
Meldex collapsed with liabilities running into several million pounds at the end of last week and Norwich based McTear Williams & Wood is bidding to sell BioProgress as a going concern and realise as many Meldex assets as possible.
BioProgress operates within the food, medical and pharmaceutical industries. The company has an extensive knowledge base in materials science, engineering and the application of its XGel™ polymer film technologies. It has an array of innovative enabling systems that can be applied to enhance its own products and those of its partners.
It is abundantly clear that BioProgress is the only real jewel in a tarnished Meldex crown. As co-founder of the original BioProgress business, former chairman and CEO and since last year, executive director, Muncaster has an inside track knowledge that could be a deal clincher. But the administrators will advertise the business this week and told Business Weekly they were confident of receiving other expressions of interest.
Chris McKay, who is handling the process, said that to a certain extent, the adminstrators could bide their time to realise the optimum deal for BioProgress, which employs around seven or eight people at the Science Park. The business continues to trade while a new buyer is sought.
McKay told Business Weekly: “We have been talking to Barry over the last few weeks and the team has expressed an interest in the business. We can afford to be reasonably patient to explore this and other opportunities.”
He said BioProgress directors had done a good job in controlling its own affairs. Meldex had otherwise become something of a shell of holding companies and overseas entities. “There’s no question that BioProgress and its technology is the main asset of Meldex,” he said.
Business Weekly understands that a significant debt is owed by Meldex to BioProgress. McKay said Meldex had entered into litigation against former directors that had proved very costly, running up large legal bills that they couldn’t recover and couldn’t afford to pay. The business had also made large losses – around £74m – in the previous year. McKay said “quite a lot of things came out of the woodwork and were still coming out of the woodwork as recently as last month.”
Despite an attempt at refinancing, the business had become untenable. Meldex directors appointed last year set about raising a new loan note to fund the business going forward, secured by a debenture over the company’s assets. When it became apparent that the business couldn’t continue, they spoke to the loan note holders who appointed the administrators.
The loan note is understood to have amounted to £6m, secured by a further £1m or so liability and while the financial position of Meldex was still being established to determine secured and unsecured creditors, at least £1m or so of debt is immediately apparent.
Anyone interested in talking to the joint administrators about buying the BioProgress business can contact the firm on 01603 877540 or email Tony Harrison: firstname.lastname@example.org