Generics plans £7m rescue bid

UK-based Generics Group has unveiled plans to raise more than £7m in new funding to avoid running out of money as early as next month.

Technology incubator Generics Group has unveiled plans to raise more than £7m in new funding to avoid running out of money as early as next month.

The Cambridge company, which invests in new technologies and carries out in-house R&D, said three miserable years for thehi-tech innovation sector had drained its reserves of cash to almost nothing.

It now plans to issue new shares in a bid to raise £7.3m, which the company said would secure its future for at least two years. Without the new funding it warned it may be unable to trade beyond mid-May.

The need for the financial rescue package reflects the difficulties that have faced Generics and others working with early-stage technologies since the end of the dotcom boom years of the late 1990s.

Third party investors proved reluctant to back new ventures, even though companies such as Generics – which works in hi-tech engineering areas such as sensors and fuel cells – were far removed from the fripperies of the internet boom years.

A slump in stockmarkets made it difficult for Generics to float off its existing investments, forcing the company to support them for longer at its own expense.

And demand for external technology consulting, another key area of Generics’ activities, fell sharply as companies drew in their horns to cut costs.

The low point came with the collapse of Quantumbeam, a promising broadband communications venture.

Ironically, the emergency fund- raising comes as Generics claims it is finally turning the corner thanks to improved sentiment towards early-stage technologies and a generally better investment scene.

It has recently secured several major deals for its technologies, including the £1.4m sale of its Sensopad automotive sensor business to TT Electronics and the successful spin-out of CMR Fuel Cells, which is developing a new mixed-reactant fuel cell system.

The group said it is also making headway in the potentially lucrative medical technology sector.

Generics said that the new money would allow it to invest further in key emerging technologies such as location tracking and biometrics.

The group has already secured support for the rescue package from its biggest shareholder, Swiss-based capital group Catella, which is itself backed by the might of the Ikea empire.

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