Balcatta-based metallurgical testing firm Ammtec Ltd has decided to offload its majority interest in a US-based company for $29 million as it revises its earnings forecast for fiscal 2009.
Ammtec said the sale of its 68.5 per centinterest in resin manufacturer Purity Systems Inc was conditional on due diligence and pre-emptive rights being waived by PSI shareholders.
Ammtec managing director Rod Smith said that while the company still believed in the resin technology PSI was developing, considerable effort and working capital was still required.
"PSI will need resources and funding to further commercialise the resin technology and this would have been detrimental to our EPS (earnings per share)," Mr Smith said.
Ammtec paid $4.3 million for PSI when it took majority control in August last year, and incurred $400,000 of PSI's loss of almost $600,000.
The sale of PSI has prompted Ammtec to revise its earnings forecast for fiscal 2009 from $10 million to $12.2 million.
The buyer intends to continue with the development of PSI resins for the recovery of heavy metals from solution and will use Ammtec to provide metallurgical testwork to its development projects on normal commercial terms.
News of the sale pushed Ammtec's shares up 12 per cent to an intraday high of $4.54 before settling at $4.35 at 14:45 AEST.
