Scotland’s state-owned bank is likely to suffer a hit after a company it backed collapsed into administration.
M Squared Lasers was the first company backed by the Scottish National Investment Bank (SNIB) which provided more than £30m in loans and other investments.
The photonics and quantum technology company, formed by Graeme Malcolm and Gareth Maker, has called in administrators as a fall in orders put pressure on its cash flow.
SNIB said its attempts to help find an alternative solution had not been successful and it could not say what the final outcome would be for the bank, which recently reported £77 million of unrealised losses on investments. Another company in its portfolio, satellite technology firm Krucial, called in administrators in June.
The bank provided M Squared Lasers with £34m in a mix of debt and equity funding. A spokesperson said: “The insolvency process is ongoing, and we don’t yet know what the outcome may be for the company or for the bank’s investment at this stage.
“As Scotland’s development bank, we were established to fill an identified gap in the Scottish funding landscape by supporting scale-up companies with high-growth potential. Risk is inherent in all investment.”
Headquartered in Glasgow, M Squared Lasers was established in 2006 and its expertise was supplied to a wide range of customers across the UK, Europe, the US and Asia.
External factors, including the pandemic, material supplies, and the conflict in Ukraine, have had a detrimental impact on the company’s trading activities.
The directors failed to find funding options and owing to a lack of cash to meet its financial obligations, the board concluded it had no option but to appoint administrators.
M Squared has ceased to trade and 28 members of staff were made redundant. The administrators, Alistair McAlinden and Geoff Jacobs at Interpath, are seeking a sale of the business and its assets.
Mr Jacobs, managing director at Interpath, said: “M Squared is a groundbreaking and award-winning technology business, which has served scientists, universities and a wide-range of private sector customers for 20-years.
“Amongst other significant and innovative achievements, the company has created a laser platform which is scalable, compact and robust, and which is contributing to studies in quantum technologies around the world.
“We are now rapidly exploring options to sell the business and its prized assets, including the company’s highly specialised intellectual property, and encourage any interested parties to contact us quickly.”
Mr McAlinden, head of Interpath in Scotland, added: “We have mobilised our specialist employee team to ensure that all possible support is provided to the company’s employees in submitting their claims to the Redundancy Payments Service.
“We are also working closely with Skills Development Scotland and their PACE team who are also mobilising to assist employees. We will liaise with the many stakeholders that have been impacted by the insolvency of M Squared over the coming days.”
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