29/10/2008 - 13:30

Eden to sell three subsidiaries for $2m

29/10/2008 - 13:30

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In a bid to shore up funds amidst the global meltdown, Perth-based Eden Energy Ltd has agreed to sell three of its subsidiaries to an Australian-listed company for some $2 million in shares.

In a bid to shore up funds amidst the global meltdown, Perth-based Eden Energy Ltd has agreed to sell three of its subsidiaries to an Australian-listed company for some $2 million in shares.

The company, which is still locked in a trading halt since late last month, said it will sell the businesses of HyRadix, Eden Cyrogenics and CTS in order to reduce its cash outflow by 70 per cent.

Eden was forced to look for alternative funding arrangements after Mumbai-based Zoom Developers Ltd defaulted on a required payment.

In August, Zoom had agreed to provide $5 million through a convertible loan to fund Eden's ongoing working capital.

Today, Eden said it has entered into a conditional agreement to sell the three businesses to an unnamed company for listed shares valued at around $2 million.

"Whilst these businesses have great potential, this decision will enable Eden to retain and focus on its remaining core projects, being its Hythane project and South Wales Coal Bed Methane project," executive chairman Gregory Solomon said.

"The recent award of a large contract by NASA to Eden Cryogenics with a value of USD$13million, to be completed over 14 months, was expected to increase the attractiveness to potential purchasers."

Mr Solomon added that further details will be released at the end of next month when certain conditions have been satisfied.

Eden is still investigating options to secure further ongoing working capital.

The company's shares will still be locked in a trading halt until funding arrangements have been settled.

Shares in Eden last traded at 14.5 cents.

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