Aether Pacific Pharmaceuticals (APP), headquartered in Christchurch, is on course for liquidation after accumulating nearly NZ$9 million in debt owed to creditors.
The company, previously trading as Medical Kiwi and operating both a cultivation facility and a clinical network, brought in administrators last month after running into serious financial trouble.
The Press reports that the firm's debts include $63,000 in outstanding wages and holiday pay owed to staff, $176,000 to the Inland Revenue, and a $4.5 million preferential security held by Emichrome, the private family company of billionaire investor Kie Chi Wong.
As the majority secured creditor, Emichrome's support would be required for any restructuring proposal to proceed. Having signalled it will not provide that support, administrators are now expected to recommend that APP be wound up at a meeting scheduled for December or January.
A liquidation outcome would trigger the sale of the company's assets, among them 500kg of cannabis and patents held by subsidiary Hardie Health, which has already entered liquidation.
At a creditors' meeting held this week, administrators presented a detailed breakdown of the company's assets, with a book value of $10.4 million. However, plant and equipment recorded at $2 million was estimated to be worth just $450,000 in practice, while $4.5 million in subsidiary shares was listed as "unknown."
The market value of the cannabis stockpile, described as "of varying quality," also remains undetermined.
During the meeting, investors questioned executive chairman Aldo Miccio and founding director Peter Win over bank statements that appeared to show both men received payments in October and November during a period when staff were not being paid.
Miccio disputed the claims and said the pair welcomed the administrators' investigation.
The decisive creditors' meeting is expected to take place within the next two months, at which point creditors will vote on whether to proceed with liquidation or approve a deed of company arrangement (DOCA).
