European High Growth Opportunities Securitization Fund (“EHGO”) has served a Notice of Discontinuance of the proceedings commenced on 11 June 2021, in which an Order was sought that the Joint Administrators (“JAs”) be removed from office in Iconic Labs Plc (“the Proceedings”).
EHGO’s decision to discontinue proceedings followed the disclosure by the JAs on 23 September 2021 of correspondence between the JAs and the London Stock Exchange (“LSE”) dated between 28 June 2021 and 13 September 2021 regarding the LSE’s proposed withdrawal of the Company’s market access unless the Company paid outstanding fees to the LSE by 27 September 2021.
On 25 June 2021, EHGO had invited the JAs to accept a funding proposal of £1.25 million to enable the Company to meet undisputed creditors’ claims, to defend disputed claims against it and to pursue claims against third parties, provided that the JAs vacated office. EHGO reiterated that the Company, once handed back to its directors, could make further draw down requests for working capital needs under EHGO’s existing financing facility. The JAs did not accept the offer, citing, among other things, unresolved claims between the Company and third parties.
On 26 July 2021, the JAs’ proposals to creditors included provision for a CVA proposal to be made. When asked for an indication of what the CVA would entail, the JAs stated on 21 September 2021 that no draft CVA proposal would be provided at that time because they were without funding. Nonetheless on 30 September 2021 (after EHGO’s Notice of Discontinuance was served), EHGO received a draft CVA proposal from the JAs, but with no indication that the alleged secured creditor would consent to it.
As a result of (among others) the absence of any timely alternative proposal (by a CVA or otherwise) from the JAs whereby the Company could be rescued prior to 27 September 2021, the impossibility of having the Proceedings determined before 27 September 2021, and the LSE’s proposed withdrawal of the Company’s market access, the relief sought in the Proceedings had been compromised rendering the Proceedings without meaning.
EHGO considers it regrettable that its proposal to rescue Iconic Labs Plc was not accepted.
EHGO commends the exemplary work done by Iconic Labs Plc’s CEO, Brad Taylor. He accepted this role in an extremely challenging moment for the company and demonstrated a firm commitment and dedication to finding solutions with the creditors and the JAs. He also put forward a strategic vision that we are confident would have created value for the company and its shareholders if he had the opportunity to pursue it. Unfortunately, for many of the reasons set forth above, it was simply impossible for him to overcome issues that long pre-dated his arrival at the Company.
View source version on businesswire.com: https://www.businesswire.com/news/home/20211015005426/en/
Contacts:
keller@ehgo.co
