Itaconix offloads stake in Danish nicotine gum firm

Sustainable specialty polymers company Itaconix announced the sale of its holdings in privately-held Danish nicotine gum company Alkalon on Wednesday.

The AIM-traded firm said its holdings in Alkalon were purchased for cash by Helmich Invest, Nolta, Solco, and Commerce Pharma Holding, who were existing shareholders in Alkalon.

It said the total cash consideration was DKK 2m (£0.24m), with the proceeds consisting of around £0.19m for the minority equity interest in Alkalon and £0.05m for the full principal and accrued interest of a shareholder loan.

Following impairments for fair value in 2016 and 2017, the book values for Alkalon in Itaconix's unaudited management accounts as at 31 December were £0.05m for the minority equity interest in Alkalon and £0.03m for the shareholder loan and its accrued interest.

Itaconix held 22.49% of Alkalon's ordinary shares, and recognised a profit of around £5,000 for its share of Alkalon's profits in its unaudited management accounts for the year ended 31 December, and a loss of £0.21m for the year ended 31 December 2017.

As it announced in 2016, Itaconix had divested its nicotine gum business in return for an initial 15% equity holding in Alkalon.

Subsequent shares from commercial milestones and minority participation in equity and debt funding increased the firm’s stake to its holdings at the time of the sale.

Proceeds from the sale would be added to the company's cash reserves, and used for future working capital needs.

“The sale of these last assets from Revolymer's legacy nicotine gum business marks the final step in transforming Itaconix into a technology innovator focused on emerging demands for sustainable specialty polymers,” said Itaconix chief executive officer John R Shaw.