Shareholder Update - Capital Management
Environmental Clean Technologies Limited (ASX: ESI) (ECT or Company) is pleased to advise that an Options funding facility is being considered which will be offered to all ESIOA and ESIOB option holders to finance the conversion into Fully Paid Ordinary Shares.
This offering is in line with previous statements by the Company regarding exploring solutions to facilitate the conversion of Options for all option holders and is a continuing part of the broader ECT Capital Management Program.
Proposed features of the Options funding facility include:
- Interest rates:
- The interest rate will be benchmarked against margin loans available in the market
- A tiered interest rate model will apply across the range of loan-to-value ratios and interest payment methods
- No margin calls
- Fixed term of up to three years
- All secured stock (i.e. stock acquired by exercise of the Options) will be held in a locked custodian account with no trading allowed
- Recourse limited to shares held as security
- Preservation of all rights attached to the shares, excluding voting
- Early exit options available subject to conditions
The offer application period is intended to open and run for a short period leading up to the expiry of ESIOA and ESIOB Options on 31 July 2017.
To administer the facility, the Company is seeking to engage an external, licensed manager to fulfil this function and is currently seeking expressions of interests for this role.
ECT Managing Director, Mr Ashley Moore commented, “This facility will give all ESIOA and ESIOB Option holders a chance to participate as a fully paid shareholder and in doing so, these new shareholders will be charged an interest rate commensurate with their leveraged exposure. We believe this balanced, arm’s length approach not only meets the regulatory requirements but strikes the right balance for the Company and existing shareholders.”
Given the importance of such an offering by the Company, the final structure would be taken to an Extraordinary General Meeting (EGM) to allow shareholders to vote on its approval.
Further information regarding the program will be made available in the lead up to the EGM in the form of a Notice of Meeting.
For the avoidance of doubt, this announcement is unrelated to the current trading halt, which will be the subject of a further announcement.
For further information, contact:
Ashley Moore – Managing Director [email protected]