AKI Arthro Kinetics

    RNS Number : 4566H
  Arthro Kinetics plc
  05 November 2008
   





    Business Update

    WEDNESDAY, 5th November 2008 - Arthro Kinetics plc (AIM: AKI) ("Arthro Kinetics" or the "Company"), the orthopedics company dedicated to
regenerating joint mobility and spinal disc function provides a business update.

    Arthro Kinetics announced on 29th September 2008 that it was in preliminary discussions which may or may not lead to an offer for the
issued share capital of the Company. These discussions continue but there is no material progress to report and the Directors are concerned
by the speed of recent progress which it understands has been hampered in part by the impact of the current economic climate on obtaining
acquisition funding.

    Of the various other discussions to realise value from certain assets within the group, one has progressed to the stage of proceeding to
legal documentation. The Company is deemed through its subsidiary companies to have control over the Cell and Tissue Bank Austria (CTBA) and
consolidates its results accordingly. The owners of the CTBA are in negotiation for its sale. Completion of the sale would enable the
repayment by CBTA of a loan of approximately EUR1m made to it by an Arthro Kinetics subsidiary which would materially enhance the group's
cash position. The transaction is targeted to complete by the end of November 2008 and, although negotiations are continuing, there can be
no certainty this transaction will complete.

    The cash position of the group remains in line with the Company's interim results announcement of 29th September 2008 indicating
sufficient cash within the group to support operations through the first quarter of 2009. This assessment continues to be made on a going
concern basis. The Directors have assessed the business in the event it cannot continue on a going concern basis and concluded that the
group's forecast cash position at the end of November 2008 will match the costs of a solvent liquidation of the group. 

    The Directors are focussed on achieving sufficient certainty with the negotiations for the sale of the group and/or the repayment of the
loan from the CTBA by the end of November to continue trading as a going concern. On this basis the group will continue to minimise costs
where possible, including headcount reductions in non revenue generating areas, to reduce the group's cash burn. One area of consideration
is the cost of maintaining the public listing on AIM. This is a material cost to the group in terms of external compliance costs and the
cost and structure of the Company's board. The party in discussions for the purchase of the group is not interested in maintaining the
public listing following the transaction. Should there be sufficient certainty in the group's ongoing trading position from the end of
November the Directors will approach shareholders with a recommendation to de-list the Company. In the absence of sufficient certainty with
regard to transactions at the end of November, the Directors will take steps to close the business.

    CONTACTS 

 Arthro Kinetics Plc                       Tel:  +49 (0)711 305 110 70
 Jason Loveridge, Chief Executive Officer
 Doug Quinn, Chief Financial Officer

 Nomura Code Securities Limited             Tel:  +44 (0)207  776 1200
 Richard Potts/Giles Balleny


This information is provided by RNS
The company news service from the London Stock Exchange
 
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