Surgical Innovations pulls the plug on state-of-the-art research and development centre

KEYHOLE surgery specialist Surgical Innovations (SI) has confirmed it is pulling the plug on plans to  build a state-of-the-art research and development centre in Leeds.

The Leeds-based specialist in the design and manufacture of creative solutions for minimally invasive surgery (MIS) secured a £5.05m Regional Growth Fund Grant as part of a project to relocate to new premises, which would include a 10,000 sq ft clinical training centre.

However, given the recent performance of the business, which saw exceptional costs of £2.6m lead to a pre-tax loss of £3.2m in the six months to June 30, the group said the project would be “critically reviewed with key stakeholders”.

This morning, in a statement to the markets, SI said “the board can confirm that this project has now been formally terminated,”.

The firm has undergone a difficult couple of months. Following the news in September that it may pull the plug on its development centre, chief executive Graham Bowland stepped down from his role, shortly followed by chief financial officer Mike Thornton.

However, to provide additional working capital whilst the board progresses its restructuring of the company’s activities, the business has raised approximately £1.5m from interim managing director, entrepreneur and founder of AESSEAL, Chris Rea, and Getz Bros & Co – the two largest shareholders of the company.

The cash has been generated by way of subscriptions for new ordinary shares of 1p each in the company and the creation of fixed rate convertible unsecured loan notes 2017.

As part of the fundraising, Yorkshire Bank has also agreed to convert its £3m revolving credit loan facility into a term loan repayable in April 2017 together with new financial covenants.

Doug Liversidge, chairman, said: “I would like to thank Chris and Getz Bros, our two largest shareholders, for providing the company with this further funding. The board’s ongoing restructuring of the company still has a long way to go before it is complete; however, the additional funds provided by Chris and Getz Bros will provide us with more flexibility to take the actions required to put the company on the road to recovery.”