30th Mar 2020 18:31
(Alliance News) - AorTech International PLC said Monday it has agreed to defer a portion of the cash used to acquire RUA, to ensure it can withstand the volatility caused by the Covid-19 outbreak.
Shares in the biomedical polymer technology firm closed 11% higher in London on Monday at 66.30 pence each.
AorTech has previously agreed with Non-Executive Director David Richmond - also owner of RUA Medical Devices - to purchase RUA for GBP950,000 in cash and 1.5 million shares at GBP1 each.
Now, however, AorTech will defer GBP425,000 for up to two years.
AorTech said this will allow the enlarged group has sufficient cash resources to meet its planned investment in Research & Development over the next year whilst providing a contingency for any short term disruption to trading due to Covid-19.
RUA suspended production temporarily last week but AorTech said its facilities are now back up and running.
"RUA is satisfied that the measures implemented meet current Government guidelines to protect employees and the wider community whilst ensuring the continued supply and development of essential medical devices," the company added.
AorTech said it is not aware of "any significant impact" from Covid-19 to its licensees.
The company continued: "It is too early to quantify fully the impact of Covid-19 on the group's business. The board is taking prudent steps to mitigate and manage its cashflow and the agreement with David Richmond to defer part of the cash consideration is part of that exercise. The board is confident that the enlarged group is well equipped and operating in an essential industry to enable both AorTech and RUA to withstand this near-term uncertainty."
By Paul McGowan; [email protected]
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