However the council’s action has caused anger and bewilderment within Redx with the company insisting it has made a reasonable offer in the last few days to repay the loan. Tony McDonough reports

Pharmaceutical developer Redx Pharma has been pushed into administration by Liverpool City Council over a £2m unpaid loan.

Liverpool Mayor Joe Anderson said the council had been left with no option after claiming the company had shown “no willingness” to repay the cash and have called in administrators from FRP Advisory.

However,  the council’s action has caused anger and bewilderment within Redx with the company insisting has made a reasonable offer in the last few days to repay the loan.

In a statement on Wednesday evening Redx said: “The company has been actively seeking to negotiate directly with LCC and also to secure alternative sources of finance in order to facilitate repayment of the loan at the earliest practicable opportunity.

“The company offered LCC an immediate payment of £1m in return for a short grace period in which to repay the outstanding amount. This offer was rejected.”

Redx chairman Iain Ross added: “The timing of this action by LCC and its advisers FRP is extremely unfortunate and quite baffling considering our efforts to have face to face discussions, including earlier today, the immediate offer of a payment plan and our latest proposal to make an immediate £1m payment in return for a short grace period.

“The company, which now comprises 84 employees, has two incredibly important state-of-the-art cancer programmes, which will shortly commence clinical development in seriously ill patients and both these assets are attracting significant partnering interest from a number of large pharmaceutical companies.

“Despite this and our assurances to resolve the matter quickly, LCC has refused to meet with me or to have any direct discussion.”

Last year, in a blow to the city, the firm relocated from its base in central Liverpool to a new home at Alderley Edge in Cheshire.

Redx, run by chief executive Dr Neil Murray, is developing inhibitor treatments for pancreatic, gastric and biliary cancer and is listed on the Alternative Investment Market, where trading on its shares have now been suspended.

Last week it reported widening pre-tax losses of £11m for the six months to the end of March after its operating costs went up. This was up from losses of £6.7m for the same period last year.

It underwent a restructure earlier this year and said it expects to make cost savings of £4.2m and it also said it was cutting 86 jobs.

The council had provided a three-year investment loan in 2012 to Redx to support its business expansion plans in the city.

Despite the council agreeing to extend the repayment deadline by two years the council said the firm has not made any repayment of any size during this period.

It also claims there was no contact was made by the company to the council in the run up to the maturity of the loan, on March 31, and the council said it was forced to make formal demand of the debt on the company.

This demand was not satisfied leaving the council with no option than to appoint administrators today. 

City Mayor Joe Anderson said: “This is a highly regrettable situation but Redx have been given more than two years to put their house in order and establish a way to repay this investment loan.

“Even at the 11^th hour the city council was willing to work on a repayment schedule but it is now clear Redx has no intention to work with us in any meaningful way.

“This investment loan was given in good faith and we have a duty to the public to ensure their money, especially during such financial difficulties, is protected.”

FRP Advisory confirmed it had been appointed as administrator of both Redx and a subsidiary, Redx Oncology.