Monadelphous Group has restructured its interest in struggling waste technology company AnaeCo, with a debt-for-equity swap and loan sale that will give the Perth engineering firm a 30 per cent stake, and a Chinese enterprise a 55 per cent interest, in the business.
AnaeCo, which built the long-delayed WMRC waste treatment plant in Shenton Park, will fall under majority ownership by Xiaoqing Environmental Protection Technology (XEPT) when the Chinese company purchases part of a loan owed by AnaeCo to Monadelphous for $11.5 million.
Monadelphous formed a joint venture with AnaeCo in 2010, with the engineering group hoping AnaeCo’s business model would provide a future pipeline of infrastructure work for the business.
The WMRC project was expected to be fully operational before the end of 2012, however it suffered numerous delays and setbacks; with the project finally reaching completion earlier this year.
XEPT will become AnaeCo’s largest shareholder with a 55 per cent stake, while Monadelphous will also convert AnaeCo’s remaining $5 million debt into equity, with the engineering group to end up owning 30 per cent of the Bentley-based company.
“We welcome this transaction which brings XEPT not only as a cornerstone shareholder, but also a substantial and successful organisation which is well established in the water, solid waste and renewable energy sectors in China,” AnaeCo managing director David Lymburn said.
“XEPT is well positioned to provide the commercial and technical resources we have been seeking to support AnaeCo’s development and growth in Australia and the Asian region.
“Importantly, this transaction fully clears the debt owed to Monadelphous, and provides an appropriate level of working capital at completion.”
The conversion price for the debt to equity swap has been set at 0.14 cents per share, with AnaeCo to hold $3.7 million cash at completion.
Somerley International acted as corporate adviser to AnaeCo.
AnaeCo shares were 50 per cent higher to 0.3 cents a share, while Monadelphous shares were 0.7 per cent higher at $11.48 each, at 10am.
