Nanosynth returning mask-making machine to Lemu Group

Nanosynth announced on Tuesday that terms have been agreed with Lemu Group, the supplier of a mask manufacturing machine to its main subsidiary Pharm 2 Farm (P2F), to return the machine.

The AIM-traded firm had said on 5 May that the performance of the machine supplied by Lemu encountered various problems from the outset, and the combined teams from P2F and Lemu had worked together to remedy the issues.

It said on Tuesday that it had not been possible to achieve the original specifications.

Under the terms of the agreement, Lemu would repay €0.18m to P2F in two tranches, being €90,000 on the return of the machine to Valencia, which would be overseen by Lemu and was expected to be around the start of September, and a further €90,000 on 30 September.

The remaining €66,000 of the €0.25m that was paid to Lemu would be paid contingently on a re-sale by Lemu of the machine to a third party, with the intention being to achieve that by 31 December.

Egremont Capital was appointed to assist with the sale, for which they would receive a commission.

“The decision to return the machine to Lemu reflects the difficulties faced by the team in commissioning a new machine for the innovative P2F masks,” said executive chairman Antony Legge.

“In the board's opinion, the agreement to recover almost 75% of the paid cost of the machine, excluding the €66,000 contingent payment, is a fair deal and we are grateful for all the efforts by Lemu in recent months to try and resolve the issues and their collaborative approach to the negotiations to return the machine.

“We will continue to supply masks to our customers through sub-contracted manufacturing via Volz Filters UK.”

At 1543 BST, shares in Nanosynth were down 5.45% at 0.78p.