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Botry-Zen in trouble

Wednesday 20th August 2008

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Botry-Zen, the maker of biological control agents, hired PricewaterhouseCoopers to assess its financial position and options after failing to raise capital from shareholders.

The company, whose products include a treatment for fungal infections on grape vines, had tried to raise the funds after defaulting on the terms of its overdraft facility with Bank of New Zealand.

Earlier this month, Botry-Zen said glitches had meant it missed production targets, denting cash flow. In the absence of an alternative source of capital, the company may be forced to sell its assets, it said in a statement today. The stock traded at 1.5 cents today, from 1 cent yesterday and has plunged 75% this year.

"The company has received some early expressions of
interest," said chairman Max Shepherd. "A sale could be
concluded within a reasonable timeframe."

It couldn't muster support from shareholders at a meeting last week to raise $1.8 million via the private placement of convertible notes and options, which it had said was "critical to the commercial future" of Botry-Zen.

The company, whose shares trade on the NZX, was set up in 2001 to develop and commercialise biological control agents. It owns an exclusive licence to technology developed with the Horticulture Food Research Institute of New Zealand, Winegrape Tech and Zenith Technology Corp.

By Jonathan Underhill

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