Safe Effect Technologies Limited is making a double play that it hopes will get it back onto the Australian Stock Exchange and in a position to properly fund the commercialisation of its brake technology.
The company has launched a takeover for Safe Effect Technologies International Limited, a company whose shareholders have a 49 per cent beneficial interest in the braking technology.
It is also on the verge of launching a $5 million convertible note placement to sophisticated investors to provide the capital to get the company relisted on the ASX and provide the necessary funds to commercialise the technology.
SETL managing director Vin Morley said SETI was a major impediment to fully commercialising the company’s sealed brake technology.
The company’s takeover bid offers SETI’s shareholders 50 million shares in SETL.
"It’s value they can vend that beneficial interest into," Mr Morley said.
SETL has had limited success in its early commercialisation endeavours with its sealed brake technology.
That technology uses a cooling fluid that is said to dramatically reduce the wear on the brakes.
With reduced wear, the brakes come into their own in harsh environments such as mine sites and there are hopes of the company breaking into the lucrative stop-go market.
The company set up a purpose-built factory in Thailand last year but Mr Morley said a lack of capital had meant problems getting raw materials and therefore having product to sell.
"We haven’t been able to produce the [amount of] product that we wanted to," Mr Morley said.
He hopes the capital raising will alleviate that.
The company has already lined up Claymore Capital in Sydney to provide $2.5 million, providing it can match it dollar for dollar.
Mr Morley said the company’s brakes set-up, which on a Toyota Landcruiser is priced in the thousands of dollars, would last the lifetime of the vehicle.
"We’ve found no wear on the brakes after 180,000 kilometres [on a Toyota Landcruiser]."
Along with the Landcruiser brakes, SETL also has a set of brakes designed for a type of six tonne truck and is working on a set of brakes for an 18 tonne truck.
If it can get its truck brakes proven, the company will be able to mount a tilt for the stop-go market which Mr Morley said was worth $52 billion in the US and $2 billion in Australia.
The stop-go market includes things such as rubbish trucks.
SETL launched a takeover bid for SETI last year but that bid failed because SETL could not meet its own condition of being relisted on the ASX.
SETI vended the sealed brake technology into SETL before that company listed on the Australian Stock Exchange in May 2002.
Mr Morley said SETL’s listing time had been poorly chosen, coming amid fallouts from the tech wreck and September 11.
