Advanced materials company Versarien Plc has taken a critical step towards administration, filing a formal notice of its intention to appoint administrators. The move comes after last-ditch efforts to secure a financial rescue for the troubled firm ultimately failed.
Funding Hopes Dashed, Administration Looms
The Cheltenham-based business, known for its work with innovative materials like graphene, confirmed the decision in a statement to the London Stock Exchange. The company's board has filed a notice of intention to appoint administrators from insolvency firm Begbies Traynor.
This legal filing provides a brief ten-business-day breathing space from creditor action. During this period, Versarien's leadership will make a final attempt to find a solution, potentially involving the sale of the company or its remaining assets to secure a future for the business.
The company's ordinary shares were immediately suspended from trading on the AIM market of the London Stock Exchange following the announcement. This suspension will remain in place indefinitely while the company's fate is determined.
The Collapse of Rescue Negotiations
Versarien's path to this precarious position was marked by prolonged financial struggles. The firm had been actively engaged in discussions with potential investors and lenders in a bid to secure the necessary funding to continue operating.
Key to these talks was a proposed loan from a specialist lender in the United States. However, these negotiations ultimately broke down without a deal being reached. With no other viable funding options immediately available, the board concluded that filing the notice was the only responsible course of action to protect the interests of its creditors.
The company had previously undertaken significant cost-cutting measures and restructuring, including asset sales, but these were insufficient to stabilise its finances in the absence of new investment.
What Happens Next for Versarien?
The immediate consequence is the protection period afforded by the notice. If a solution cannot be found within this window, the appointment of administrators from Begbies Traynor is expected to become effective.
In such a scenario, the administrators' primary duty would be to act in the best interests of the company's creditors. This would likely involve:
- Exploring any remaining options for a going-concern sale of the business.
- Marketing and selling the company's intellectual property, equipment, and other assets.
- Managing the wind-down of the company's operations.
The company has stated it will make further announcements to the market as and when appropriate, keeping stakeholders informed of developments during this critical period. The future of Versarien, once a prominent name in the UK's advanced materials sector, now hangs in the balance during these final negotiations.
