Glasgow laser company M Squared Lasers has fallen into administration, resulting in the loss of twenty-eight jobs, a severe blow to the Scottish National Investment Bank, which first backed the business.
Founded by Dr Graeme Malcolm and Dr Gareth Makerin in 2006, the firm researched and developed photonics and quantum technologies for real-world uses, and exported award-winning products across the UK, Europe, the US and Asia.
Alistair McAlinden and Geoff Jacobs, managing directors at Interpath, have been appointed joint administrators to M Squared Lasers, and said that the company had faced trying times in the aftermath of the pandemic and Russia’s invasion of Ukraine.
These and other macro factors have had a ‘detrimental impact’ on M Squared’s trading, due to a scarcity of key components, tightening of the market for skilled staff and reduced orders from key customers, resulting in a constrained cash position.
“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,” said McAlinden.
“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.”
Despite ceasing to trade, the administrators said they are exploring options to sell the business and assets, which include a suite of intellectual property assets, a core customer base, some work-in-progress and stock.
The news comes as a heavy blow to the Scottish National Investment Bank, with M Squared being the very first business the development bank backed upon opening in 2020.
SNIB’s initial investment of £12.5 million was hailed by then First Minister Nicola Sturgeon, who said the laser firm was an example of a growing Scottish company ‘key to our economic recovery and future prosperity’.
Since then, the SNIB’s investment in M Squared has grown considerably, resulting in an exposure of around £34 million.
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In a statement reported by the Herald, a spokesperson for the Scottish National Investment Bank said: “The bank has been working with the business and other stakeholders to find an alternative solution, but unfortunately, this has not been possible.
“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.
“We are mandated to take on higher risk than other commercial investors to drive growth in the economy. We have always said that some failures will be inevitable, and our strategy is based on the entire portfolio over the long term.”
M Squared’s collapse adds to the development bank’s troubles following an £8 million loss on Circularity Scotland Limited last year, and a ‘paper loss’ of £77 million across its wider portfolio.
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