Allied Minds to discontinue funding for seven subsidiaries

Allied Minds has announced a restructuring and the reallocation of capital and management resources across the portfolio and pipeline which would result in discontinued funding for seven subsidiaries.

The group said a process would be undertaken to seek strategic alternatives for these businesses, which could include sales or transfers of legal entities or assets, or liquidations.

Capital and management resources unlocked from this process would be diverted to other companies and opportunities in the portfolio where there was greatest potential for value creation.

It aid attention would be focused in particular on its more advanced subsidiaries and most promising early stage companies, and on scaling its origination platform to take full advantage of opportunities across its network of research institutions and corporate partnerships.

It said the seven discontinued subsidiaries were: Biotectix; Cephalogics; CryoXtract; Novare Pharmaceuticals; Optio Labs; RF Biocidics; and Tinnitus Treatment Solutions.

It said discontinuation of funding at these subsidiaries would free up approximately $14m of capital spend budgeted for 2017 but so far not undertaken, or approximately $9m net of a restructuring charge currently estimated at $4.7m to be taken in the second quarter.

As at 30 June 2016 the discontinued subsidiaries in aggregate represented $146.6 million of Allied Minds’ group subsidiary ownership adjusted value (GSOAV).

The group said it was currently expected that this value would be marked down in its entirety on publication of the full year results, but with some modestly offsetting net positive movements elsewhere in the portfolio.

At 9:41am: (LON:ALM) Allied Minds PLC share price was -39.85p at 221.15p

Story provided by StockMarketWire.com

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