M8 Sustainable has secured the $10 million of convertible notes it needed to complete its Gingin facility and pay other debts after its $8 million minimum raising fell short earlier this week.
M8 Sustainable has secured the $10 million of convertible notes it needed to complete its Gingin facility and pay other debts after its $8 million minimum raising fell short earlier this week.
The ASX-listed waste management company secured the loan from its largest shareholder, M8 Holdings, a company owned by M8 Sustainable founder and board member Saithsiri Saksitthisereekul. Mr Saksitthisereekul is also chair and chief executive of Thailand-based Clover Power.
The update followed a brief period when M8 Sustainable was suspended from quotation, which managing director Tom Rudas said was an administration error that was quickly resolved.
The company said the loan meant it was now funded to complete the final stage of construction at its Gingin Landfill Facility, which is due to open in the December quarter.
It said about $3.1 million would be allocated to repay M8 Holdings for a loan which M8 Sustainable entered prior to listing.
The balance of funds is anticipated to be used to repay a loan from Remagen Capital Management and provide ongoing working capital.
M8 Sustainable needed the loan to carry out these activities after its entitlement offer failed to raise the minimum $8 million required to complete it.
According to an investor presentation from May 2022, M8 Sustainable was heavily relying on the raising to pay debts, namely the $11 million loan it secured from Remagen Capital Management which it was at risk of defaulting on.
The announcement said if the offer was not successful, there was uncertainty as to whether the company could continue as a going concern.
According to the company’s 2021 financials, M8 Sustainable posted a net loss before tax of $5.1 million and net liabilities of $4.8 million.
Mr Rudas told Business News the loan from M8 Holdings had “resolved everything”.
“That’s why we didn’t want to do a piecemeal capital raising, raising just $2 million or $3 million just to kick the can down the road,” Mr Rudas told Business News.
“We raised sufficient funds that, from our perspective, will get us to the point where we can be operating profitably.”
Mr Rudas was upbeat about the company’s prospects.
He said the Gingin landfill project would be a gamechanger for the company, filling a much-needed gap in the northern suburbs.
Mr Rudas said demand for recycled construction materials from its Maddington facility had skyrocketed.
“We have been producing quite a lot of recycled products for the civil construction market and basically it’s sold as soon as it’s produced,” he said.
“We use recycled concrete and road base and drainage aggregate and it’s walking out the door.
“The market, at this stage at least, and for the foreseeable future, is quite bullish in this space.”
The company listed on the ASX in 2019.
