Environmental Clean Technologies Limited (ASX: ESI) (ECT or Company) provides the following update on capital raising activities.
Status of Monash Capital Share Placement Settlement
The ‘Monash Capital transaction’ approved under resolution 4 at the general meeting on 27 April 2012 has experienced some delays.
In correspondence received from Monash Capital on 18 July 2012, the Company has been advised that Monash Capital remains confident that the transaction can be finalised by 26 July 2012.
In the event there are delays beyond 26 July 2012, Monash Capital has proposed a contingency program comprising the issuance of up to 300,000,000 Fully Paid Ordinary Shares (ESI) at $0.02, with 300,000,000 Options (ESIO). If the revised program is required and endorsed by the Board, funds would be provided to the Company as a Convertible Loan subject to Shareholder approval at an EGM.
In the correspondence Mr. Youren states “We are still very committed to the ECT investment and are including the company in a number of additional projects that we have underway. We can confirm that the funding that we have organised in conjunction with our partners IMFA includes funds for the development of Coldry, Matmor and EL5119.”
Interim Funding Measures
In the meantime, the Board has accepted a “FAST Finance” loan through Greenard Willing which will effectively provide a $1 million advance against the expected R&D tax concession due in October-November 2012.
The Board believes that this is a reasonable source of short-term finance and an appropriate arrangement.
The terms of the FAST Finance loan are as follows:
- Term: 6 months
- Repayment: Cash in full from the R&D tax rebate refund
- Interest Rate: 15% p.a. payable upfront
- Distribution Fee: 5%
Mr Michael Davies, Executive Chairman said “We appreciate the candid and responsible approach adopted by Monash Capital. The contingency offer contained in the correspondence of 18 July 2012 is indicative of their genuine interest in the Company. Naturally, the Board is keen to resolve our longer term funding requirements and trust that the contingency plan is not required. In the meantime, the Interim Funding Measures will allow the continuation of the Design for Tender program – a critical objective for the company.”
For Further Information Contact:
Mike Davies – Managing Director +61 3 9909 7684 or [email protected]