Hemosol declares insolvency; shares under review by TSX

Hemosol declares insolvency; shares under review by TSX.

The Toronto Stock Exchange is reviewing the listing of the common shares of the biotech company Hemosol Corp. after the firm told investors it is insolvent.

The exchange said the shares are being reviewed "on an expedited basis."

The review could lead to the delisting of Hemosol's shares (TSX:HML) from the exchange.

As part of its basic listing requirements, the TSX stipulates that listed companies must have at least one million freely tradeable shares with an aggregate market value of $4 million, or $10 million for issuers qualifying under separate criteria for technology companies

On Nov. 22, the company said it had defaulted on the interest payments on its $20-million credit facility. Hemosol said it needed more capital to keep operating.

On Thursday, the company said it was insolvent, adding that it had filed notice of intent to make a proposal to its creditors under the Bankruptcy and Insolvency Act. The company has appointed PricewaterhouseCoopers Inc. to act as trustee under the proposals.

Hemosol restructured in 2004 and dropped its main blood substitute product Hemolink due to safety concerns.

Last month, the company cut 50 jobs – about two-thirds of its staff – in a bid to preserve cash.

In mid-August, the company reported a net loss for the second quarter of $6.9 million, compared to net income of $2.9 million for the quarter ended June 30, 2004.

Hemosol shares closed at 22 cents on the TSX, down seven cents on the day.