BBC

Friday, 19 January, 2001, 13:30 GMT Lab firm in crucial survival talks

Brian Cass, managing director, talks to a HLS supporter The drug testing company Huntingdon Life Sciences is deep in twelth hour talks with an unnamed US rescue buyer.

The company has until midnight on Friday to repay a 22.6 million pound loan to the Royal Bank of Scotland or else go bust.

The company said in a statement that news about whether the lab manages to clinch the deal ahead of the 12pm deadline will be made later on Friday.

And Home Secretary Jack Straw on Friday added his say to the fast spreading controversy surrounding the firm.

Mr. Straw renewed the government's pledge to change the law to protect workers of Huntingdon Life Sciences and the staff of financial institutions from demonstrations outside their homes by animal rights protectors.

Hanging on

The UK research firm Huntingdon Life Sciences (HLS) may go under if it does not repay its loans to Royal Bank of Scotland and other creditors on Friday.

If it does not find a new backer, the company's last remaining hope is that its creditor banks will extend the deadline, but this appears unlikely, given that they have already extended the deadline three times.

Failure to secure extra funds could spell receivership for the firm, which employs 1,200 people at its UK headquarters near Cambridge.

While the firm said last August it had won, "in principle", backing for a cash injection, protests by animal rights activists have hindered efforts to finalise an agreement.

Government support

Anti-vivisectionists objecting to the firm's use of animals in testing products such as medicines, foodstuffs and weedkillers have targeted HLS laboratories, customers and shareholders in a drive to close the company.

Home Office minister Mike O'Brien revealed on Wednesday that the firm was close to sealing a refinancing deal.

While Huntingdon chiefs have declined to name the potential investor, over fears it would be targeted by anti-vivisectionists, the backer is a large financial group based in North America, the Financial Times newspaper said on Thursday.

City protests

Royal Bank of Scotland, one of the firm's current backers, has been targeted by campaigners intent on persuading customers to close accounts over the bank's links with HLS.

The website of protest group Stop Huntingdon Animal Cruelty urges campaigners to "get outside and inside" RBS branches.

The site also includes a list of HLS customers and shareholders, and directors of NatWest and RBS, including address details.

Citibank and HSBC are among investors who have sold shares in HLS following pressure from animal rights campaigners.

Anti-vivisection extremists have firebombed the cars of HLS employees and issued death threats, prompting the government to consider giving police extra powers to tackle animal rights protesters.

Protection plea

The company's battle for survival has raised government fears that pharmaceutical companies, which rely on animal testing, could be deterred from doing business in the UK.

Home secretary Jack Straw told a Cabinet meeting on Thursday: "Animal testing in this context is absolutely essential. A huge range of treatments and drugs depends on it.

"Pharmaceuticals are one of the biggest industries in this country... and it is very important we do what we can to protect them."

HLS shares surged to 9.25p early on Thursday over news of the new backer, before easing in later trade to close at 6.25p, 32% up on the day.

-- Rachel Gibson (rgibson@hotmail.com), January 19, 2001