Modern Water, the owner of world-leading technologies for water and wastewater treatment and for water quality monitoring, is continuing to explore its options to raise additional capital in order to provide a sustainable basis on which to continue to operate the Group.
Five days ago the company announced that Alan Wilson had today resigned as Non-Executive Chairman and Director with immediate effect. He is succeeded as Non-Executive Chairman by Dr Piers Clark, currently a Non-Executive Director of the Board.
On 6th August Modern Water announced that it intends to restructure its group of companies with the aim of focusing on its innovative membranes process technologies.
The company is currently in advanced negotiations to sell the assets of Modern Water Inc., the Company's US-based monitoring division.
In keeping with the new strategy of focusing on its core innovative membrane process technologies, Modern Water has decided to retain control of Surrey Aquatechnology Ltd, a subsidiary which holds most of the Group's patents.
Simon Humphrey, Modern Water's CEO, said:
"We are working on overcoming our liquidity problems in order to retain a restructured business that can service our customers with world-leading innovative technologies."
On 23rd July Modern Water filed notices of intention to appoint an administrator in respect of two of its wholly-owned subsidiaries - Modern Water Services Ltd (MWSL) and Surrey Aquatechnology Ltd (ASL).
The companies are the principal operating subsidiaries of Modern Water’s Membrane Division. The company itself and other Group companies, including its US-based Monitoring Division, are not affected by the Notices of Intention and continue to trade normally.
In a statement issued to the London Stock Exchange, Modern Water said:
“The issue of the Notices of Intention is a consequence of the continuing shortfall in working capital as previously announced and its effect is that an interim moratorium comes into force to allow the specified companies (MWSL and ASL) some temporary protection from creditors and legal claims whilst various options are explored to seek alternative finance.”
“The interim moratorium is for a period of ten business days. The Notices of Intention do not in themselves denote the appointment of administrators. The Board may at any stage during this period decide not to appoint the administrators if the situation can be resolved.”
Modern Water said it is continuing to manage its working capital carefully with the business being funded using extended credit lines alongside increased efforts to convert debtors to cash.
However, it cautioned:
“Whilst this may be sustainable in the short term, it is important that additional funding is secured in the near term in order to provide a sustainable basis on which to continue to operate the Group. The Company continues to explore options to raise additional capital.”