Wastewater treatment company QED Occtech is planning to split itself in two after conceding the merger that formed the current structure has been a failure.
Wastewater treatment company QED Occtech is planning to split itself in two after conceding the merger that formed the current structure has been a failure.
QED Occtech was established less than two years ago, in October 2002, when technology company QED merged with Occtech.
The company announced last week that it would specialise in future as the owner and developer of wastewater technologies.
Its operating subsidiaries will be sold to its senior management team, comprising executive chairman Doug Miller, managing director Ivan Bristow and executive director Peter Macintosh.
Total consideration for the transaction will be the cancellation of 101.3 million shares (about 42 per cent of total shares on issue) held by the senior management team and their associates, at a deemed value of 2 cents per share, valuing the deal at $2 million.
In a statement to the Australian Stock Exchange, the company said it had originally acquired Occtech to be more actively involved in the commercialisation of technology solutions.
“This acquisition has not delivered the financial rewards expected, and as a result the board of QED [Occtech] has elected to return to its previous core business and outsource the commercialisation and implementation of technologies to third parties,” it said.
If shareholders approve the proposed changes, Messrs Bristow and Macintosh will resign from the company’s board.
Mr Bristow said the decision to split the business followed the failure of shareholders to support a planned $800,000 capital raising (at 2 cents per share) in May.
This, in turn, followed a $1.36 million loss in the half year to December 2003, on total revenue of $2.61 million.
In the 2002-03 financial year, the company incurred a loss of $2.87 million on revenue of $4 million.
Under the planned split, QED Occtech will retain ownership of all of its intellectual property and aims to earn royalties from their commercialisation.
Its most widely installed product is the QTFS wastewater treatment plant, which has been installed in dairies, pig farms, textile factories and cement plants.
It has also installed secondary fluid processing units using membrane technology at a number of mining and industrial sites.
The company has mothballed its ‘cyanofree’ technology, for the recovery of cyanide from gold mining operations, which had been touted at the time of the merger as having great potential.
The company will retain ownership of the ‘build, own, operate’ wastewater treatment plant installed at PB Foods in Balcatta last year.
Mr Bristow said the plant was running well after it had encountered start-up problems.
“We have 11 weeks of very good production, we are very happy with the way it is performing now,” he said.
The senior management team (through Wisemind Investments) will acquire the company’s operating subsidiaries, including all current contracts and work in hand and all operations and maintenance obligations for current plants
Wisemind will be granted an exclusive global licence for QED Occtech’s technologies and in return will pay a royalty of 5 per cent of future revenue (subject to various adjustments).