Harvest Tech in boardroom blue

UPDATED: The ousted chief executive and the current chairman of Harvest Technology Group are battling for control of the ASX company, which counts some well-heeled Perth investors as shareholders.

The Bentley-based company announced this morning that chief executive Paul Guilfoyle and chief operating officer Linda Shields had been removed from their roles.

Chairman Jeff Sengelman has become executive chairman for an interim period while Sydney-based tech executive Ilario Faenza has joined the board as a non-executive director, with effect from Monday.

The four-member board has resolved to appoint Mr Faenza as executive director.

“As an executive director, Ilario will take on special duties at the direction of the board and assume all responsibilities as CEO,” the company stated.

The company also announced this morning plans to raise $1.59 million through a deeply discounted placement priced at 1.5 cents per share.

The board signalled more changes are on the way.

“During this time of necessary transition, renewal and recapitalisation, the company will rapidly review and enhance its current operations, structure and strategic plan to ensure its future success,” they said.

The company updates come two days after Mr Guilfoyle and his partner Julie Guilfoyle lodged a section 249D notice requesting the company hold a general meeting of shareholders.

They have proposed the removal of two directors: Canberra-based Mr Sengelman, who has been chairman since 2020, and Brisbane-based Ross McKinnon, who joined the board in April last year.

In their place, they have proposed the appointment of Mr Guilfoyle and Perth-based tech executive Robert Daw, who recently stepped down as chief technology officer at global company Hexagon Mining.

The company has said it would consider the request, which was received at 3:21pm on Monday January 29 but not released to the market until the following afternoon.

UPDATE: Harvest announced on Friday 2 February the 249D notice had been withdrawn and therefore it will not be required to convene a shareholders' meeting. It did not provide further details.  

The competing factions will be seeking support from the company’s major shareholders, which include Schaffer Corporation chair John Schaffer and former Gull Petroleum director Ian Green.

The boardroom ructions come at a challenging time for the company, which recently slashed staff numbers from 42 to 32.

Its latest quarterly report shows it recorded revenue of just $520,000 in the December quarter and had an operating cash outflow of $1.77 million.

It finished the year with $634,000 in cash, helped by a $250,000 loan from Mr Guilfoyle.

An R&D tax refund of $1.67 million paid early this month has bolstered its finances.

The company also recently announced two orders from a customer in the defence sector for its Nodestream technology.

Nodestream is an ultra-low bandwidth technology used for secure communication in remote locations, with the company targeting the defence and offshore oil and gas sectors.

Total orders received by the company this month are worth $680,000.

Its share price has been in the doldrums, trading recently at 2 cents per share after peaking at about 40 cents three years ago.