Mithra looks for money without founder Fornieri

It is whispered here and there that his departure is linked to the financing round at Mithra. But both Fornieri and Mithra argue that personal reasons lie behind the departure of the founder, who remains the largest shareholder (23.2%). “Over the past year I have worked closely with CEO Leon Van Rompay and the directors to transfer all my knowledge of the company I have led for 22 years,” says Fornieri. ‘The time has come to devote my energy and expertise as an entrepreneur to other professional projects.’

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The essence

• The pharmaceutical company Mithra will raise approximately 22 million euros from existing shareholders.
• It is also conducting exclusive negotiations on a convertible bond loan, which can amount to 100 million euros.
• In parallel, ex-CEO and founder François Fornieri is leaving the board of directors, officially ‘for personal reasons’.
• With a stake of 23.2 percent, Fornieri is the largest shareholder in Mithra.

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“I’m actively working on the creation of a new company in the pharmaceutical sector – in a way a return to my first love,” Fornieri tells our sister newspaper L’Echo. “I prefer to focus on this new project now and I have full confidence in Mithra’s directors. But they can of course call on me if they need my expertise for a specific file. In any case, it’s not correct to say that Mithra pushed me aside.’

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Fornieri is also a shareholder in Millésime Chocolat and in the security firm Protection Unit. It has grown to number three in its sector through acquisitions. ‘We want to follow a similar path with Millésime’, says the entrepreneur. He also has real estate and car parks in his portfolio.

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Fresh money

The news about the final break with Fornieri is accompanied by the announcement of a capital increase of at least 20 million euros. Mithra will approach its existing shareholders and new – as yet unidentified – investors, who together have already made conditional commitments for 21.9 million euros.

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The Flemish investors Marc Coucke, Bart Versluys and Stijn Van Rompay, among others, committed themselves to putting fresh money on the table, as did the investor Glenernie Capital, co-founder Jean-Michel Foidart and the Walloon public investors Noshaq and SRIW.

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Mithra says she needs the money for additional studies into the hot flash drug Donesta, which is in the third research phase, and to supplement working capital. At the end of last year, the Liège company had a net cash position of 32.9 million euros. It has already raised 28 million since the beginning of this year. It ‘burns’ about 100 million euros in cash per year.

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Full screen display

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The money from Coucke and co. must fill the coffers in anticipation of greater financing. In addition, Mithra wants to issue a convertible bond of 100 million euros, so that it no longer has to rely on the credit lines of LDA Capital and Goldman Sachs† It would concern a loan that can be taken out in various tranches of a maximum of 65 million euros per tranche – or 75 million under certain conditions.

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The pharmaceutical company took end of 2020 also raised 125 million euros through a five-year bond loan at a solid interest rate.

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According to the stock exchange Degroof Petercam, the proceeds of 120 million euros from the capital increase and from the new guaranteed bond loan, which are under exclusive negotiations, should be enough for Mithra to finance the activities until the end of this year. Then there should be a licensing deal for the drug Donesta.

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Analysts assume that this license deal may be accompanied by an upfront payment of 200 million to 400 million euros.

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Dilution

Negotiations are still ongoing on the other terms of the new bond, such as the interest rate. Mithra is looking for a solution with which it can ‘maximum safeguard’ its cash flow. Interest, fees and other amounts owed to lenders may also be paid in whole or in part in shares.

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The small shareholders are at risk of being significantly diluted by the new financing measures. Mithra soothes them with the message that further cost cuts will be made to ‘the cash runway’ (the time a company has to remain solvent without attracting additional funds, ed.) and improve performance.

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In the Lee

Due to his departure as director of Mithra, François Fornieri will no longer be considered an ‘insider’. He no longer has to report the sale or purchase of Mithra shares to the stock market watchdog FSMA and can now trade in the shadows. He only has to report whether he falls below or exceeds certain thresholds. In view of its current participation (23.2%), Mithra’s thresholds are 20 and 25 percent.

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Fornieri is the youngest year and a half been a very active insider† Between the beginning of 2021 and today, he sold Mithra shares for more than 25 million euros. ‘I only sold stocks to pay back bank loans. It is only 2 percent of my total investment in Mithra,” he said of those transactions in early April. He added that he understood that his recent sales “raise questions in the current context and can be misinterpreted”.

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