Seed Capital Solutions (LSE:SCSP) has terminated its proposed acquisition of 4DM after the Spanish Ministry of Economy, Trade and Business indicated it would not grant the regulatory authorisation required for a foreign investor to take control of a company operating in artificial intelligence, a sector Madrid classifies as strategic.
The AIM-quoted shell company had flagged on 29 June that change-of-control provisions within 4DM were already causing delays to transaction documentation, but the deal has now collapsed entirely following confirmation from 4DM that ministerial approval would not be forthcoming.
The failure leaves Seed in an acute financial position: its cash balance stood at approximately £10,000 as of 30 June, and adviser costs accrued in anticipation of the deal's associated fundraising remain unpaid.
The company is in discussions with creditors over those liabilities and will need fresh capital to cover working capital and fund a search for an alternative target, having been formed originally to acquire businesses with strong environmental, social and governance credentials.
