19th Feb 2024 11:23
(Alliance News) - Faron Pharmaceuticals Ltd shares fell on Monday, after it said it is in breach of several undertakings agreed in a secured debt deal with lender IPF Fund II SCA, SICAV-FIAR.
Shares in Faron were down 20% to 212.00 pence each in London on Monday late morning.
As a result, the Turku, Finland-based clinical-stage biopharmaceutical company specialising in cancer therapies said, following subsequent waiver letters provided by IPF, it is in several events of default, as defined under the funding deal agreed in Februry 2022.
Faron said its bank accounts are pledged to IPF, while IPF has notified Faron's banks of the blocking of the pledged accounts due to the breaches.
Faron said it currently does not have ability to remedy the breaches, nor make payments to third parties without separate consent from IPF. Negotiations are ongoing with IPF, Faron said, related to a possible restructuring of the loan facility, alongside waiver of covenant obligations.
A further announcement will be made in "due course", Faron said. It said its total cash and cash equivalents stands at around EUR4.3 million, which it said was enough to cover the company's financing needs until the beginning of April.
By Greg Rosenvinge, Alliance News senior reporter
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