Environmental Clean Technologies Releases Shareholder Update: Stock Shoots Up By 10%

Environmental Clean Technologies releases Shareholder update: Stock shoots up by 10% Environmental Clean Technologies Limited (ASX: ECT) is a South Yarra, Australia-based company engaged in investment, research, development, and commercialisation of environmental friendly energy. It is also in business of commercialising leading-edge coal and iron-making techniques. On March 8th, 2019, the company provided a shareholder update stating two key points. The first update informed, about the extension of the offer period for the current 17% discount under the Equity Lending Facility (ELF) incentive program stretched to March 22nd, 2019 until 5 pm AEST. This update follows the Company’s announcement of February 18th, 2019 outlining its ELF incentive program which initially offered a tiered, time-based discount, starting at 30% for applications received until 5 pm AEST on March 1st, 2019. Later, the discount was reduced to 17% for application received by 5 pm AEST on March 15th, 2019. Secondly, the decision around the extension was considered due to the announcement, by company’s India-based project partner NMDC Limited (NMDC) of their next board meeting which is due to be held on March 12th, 2019. The new deadline will provide enough time for the Company to update shareholders, regarding the results of NMDC’s board meeting, before the ELF borrowers decide to participate in the incentive offer. The two units are expected, to sign the Research Collaboration Agreement (RCA) for the India Project, and financially close the deal by March 31st, 2019. On May 30th, 2018, a research collaboration agreement (RCA) was signed between the company, and two Indian Public Sector Undertakings (PSUs) including NLCIL and NMDC, for the implementation of an ~AUD 35-million research and development (R&D) project between Australia and India. The RCA aims to scale up ECT’s Matmor (iron making), and Coldry (lignite drying) technologies. After the R&D phase at the pilot plant, the parties will further work on an integrated steelmaking facility for commercial production. The technical and economic feasibility study was completed in July 2016 and estimated the project’s capacity to be around 500,000 tonnes per annum of steel output, and a required capital investment of AUD 300 million. For the half-year ended December 31st, 2018, Environmental Clean Technologies, recorded revenue from ordinary activities at around $32,622, down 2.2%, and the loss from ordinary activities after tax attributable to the owners at $2.34 million, down 14.6%, on the prior corresponding period ended December 31st, 2017. During the half-year, ECT also obtained a debt facility of $1 million from Challenge Bricks & Roofing Pty Ltd, via granting a security interest over the ELF loans. The net cash and equivalents were recorded at $31,368. There were massive net cash outflows of $736,865 from operating activities comprising payments to suppliers, and employees as well as interest and other finance costs paid. The investments into buying property plant and equipment also resulted in net cash outflows of $96,012. However, financing activities like the issue of shares and proceeds from options contributed to net cash inflows of $252,494. Environmental Clean Technologies has a market cap of AUD 48.01 million. As on 8 March 2019, the ECT stock price closed at AUD 0.011, zooming up by 10%, indicating an intra-day gain of AUD 0.001.

Environmental Clean Technologies Limited (ASX: ECT) is a South Yarra, Australia-based company engaged in investment, research, development, and commercialisation of environmental friendly energy. It is also in business of commercialising leading-edge coal and iron-making techniques.

On March 8th, 2019, the company provided a shareholder update stating two key points. The first update informed, about the extension of the offer period for the current 17% discount under the Equity Lending Facility (ELF) incentive program stretched to March 22nd, 2019 until 5 pm AEST. 

This update follows the Company’s announcement of February 18th, 2019 outlining its ELF incentive program which initially offered a tiered, time-based discount, starting at 30% for applications received until 5 pm AEST on March 1st, 2019. Later, the discount was reduced to 17% for application received by 5 pm AEST on March 15th, 2019.

Secondly, the decision around the extension was considered due to the announcement, by company’s India-based project partner NMDC Limited (NMDC) of their next board meeting which is due to be held on March 12th, 2019. The new deadline will provide enough time for the Company to update shareholders, regarding the results of NMDC’s board meeting, before the ELF borrowers decide to participate in the incentive offer. The two units are expected, to sign the Research Collaboration Agreement (RCA) for the India Project, and financially close the deal by March 31st, 2019.

On May 30th, 2018, a research collaboration agreement (RCA) was signed between the company, and two Indian Public Sector Undertakings (PSUs) including NLCIL and NMDC, for the implementation of an ~AUD 35-million research and development (R&D) project between Australia and India. The RCA aims to scale up ECT’s Matmor (iron making), and Coldry (lignite drying) technologies. After the R&D phase at the pilot plant, the parties will further work on an integrated steelmaking facility for commercial production.

The technical and economic feasibility study was completed in July 2016 and estimated the project’s capacity to be around 500,000 tonnes per annum of steel output, and a required capital investment of AUD 300 million.

For the half-year ended December 31st, 2018, Environmental Clean Technologies, recorded revenue from ordinary activities at around $32,622, down 2.2%, and the loss from ordinary activities after tax attributable to the owners at $2.34 million, down 14.6%, on the prior corresponding period ended December 31st, 2017.  During the half-year, ECT also obtained a debt facility of $1 million from Challenge Bricks & Roofing Pty Ltd, via granting a security interest over the ELF loans.

The net cash and equivalents were recorded at $31,368. There were massive net cash outflows of $736,865 from operating activities comprising payments to suppliers, and employees as well as interest and other finance costs paid. The investments into buying property plant and equipment also resulted in net cash outflows of $96,012. However, financing activities like the issue of shares and proceeds from options contributed to net cash inflows of $252,494.

Environmental Clean Technologies has a market cap of AUD 48.01 million. As on 8 March 2019, the ECT stock price closed at AUD 0.011, zooming up by 10%, indicating an intra-day gain of AUD 0.001.


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