A drug distributor which had its licence suspended earlier this year by Britain’s medicines watchdog has hired City advisers to raise tens of millions of pounds of new funding.

Sky News has learnt that Converse Pharma Group, which is one of the biggest suppliers to community pharmacies across the UK, is working with Teneo Restructuring on a hunt for additional capital.

City sources said the company, which was formed from a management buyout in 2013, was in talks with its lenders at the state-backed NatWest Group and Secure Trust Bank about the process.

The lenders have hired PricewaterhouseCoopers to advise them, according to one insider.

Converse Pharma distributes a range of generic drugs, including flu vaccines, employing close to 1,000 people at 11 sites across the country.

In total, it sells more than 6,000 products to 4,000 customers, the bulk of which are community pharmacies, giving the company an important role in UK healthcare provision.

In March, one of Converse Pharma’s subsidiaries, DE Group, had its licence suspended by the Medicines and Healthcare products Regulatory Agency (MHRA) for breaches of its terms, forcing it to mothball its operations.

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The licence of DE Group’s Testerworld unit is understood to have been largely reinstated in April following re-inspections by the agency.

An industry source said on Wednesday that Converse Pharma had intended to explore a sale process as part of a planned exit for its shareholders shortly before the MHRA suspension was implemented.

The company is now said to be exploring raising equity or debt – or a combination of the two – as it seeks to exploit growth opportunities, particularly through expansion in the south of England.

“The sector as a whole is expected to grow at pace in the next five years, meaning there is significant potential for Converse Pharma if it can raise the funding it needs,” the industry source added.

Converse Pharma could not be reached for comment.

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