Coote turns to Elph for help

Coote Industrial's financial woes have forced it to turn to its bidder, Elph, for help as it reiterates to shareholders to take no action on the once rejected takeover offer.

In a statement today, Coote said it had entered into discussions with Elph in relation to possible funding support for the company.

Included in the talks was Coote's $6.5 million payment to Elph, which last month exercised its put option to sell its stake in Coote subsidiary, Greentrains.

Coote today said that Elph has agreed to extend the date of payment of $6.5 million from May 20 to May 28.

Additionally, Coote said that it was in talks in relation to Elph providing additional funding to support Coote with its funding requirements.

"It should be noted that discussions with Elph are at a preliminary stage and there can be no assurance that any binding transaction will be entered into," Coote said in the statement.

"Pending further developments, the Board reiterates its advice that shareholders take no action in relation to the Elph offer, which has been extended to 26 May 2010."

Elph is offering 26 cents for each Coote share in its proportional takeover offer that has been capped at 35 per cent. Elph currently holds a 28.84 per cent shareholding in Coote.

The latest development comes a week after Coote downgraded its earnings forecast to a $2 million full-year loss.

Shares in Coote were down one cent to 23c at 11:18 AEST.