28/02/2006 - 21:00

SafeEffect to relist, looks to raise $3m

28/02/2006 - 21:00

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Former Orbital director Ken Johnsen is leading the revival of little-known Balcatta company SafeEffect Technologies, which is aiming to relist on the Australian Stock Exchange this month after a two-and-a-half-year suspension.

SafeEffect to relist, looks to raise $3m

Former Orbital director Ken Johnsen is leading the revival of little-known Balcatta company SafeEffect Technologies, which is aiming to relist on the Australian Stock Exchange this month after a two-and-a-half-year suspension.

Mr Johnsen, whose modest new office is a just a few hundred metres down the road from Orbital, joined SafeEffect last September.

He inherited a company with a litany of financial, legal and marketing problems but is confident the strength of its technology will eventually bring good returns.

SafeEffect owns the rights to a ‘wet braking’ system that is primarily used on four-wheel drive vehicles in the underground mining industry.

Mr Johnsen said 700 brake sets were currently in use and he was seeking to accelerate the commercial uptake of the system.

He said it appealed to mining companies that currently had to replace brake discs every few weeks, and in some cases every few days.

The system also offers safety features that appeal to companies wanting to maximise their safety record.

For instance, BHP Billiton has issued guidelines under its fatal risk protocol that underground vehicles that carry two or more people must be fitted with ‘fail safe’ brakes.

Most of the brake systems sold by SafeEffect have been fitted to LandCruisers, which are the predominant vehicle in Australia and Indonesia.

Mr Johnsen said a Canadian distributor had also built up a sizeable market, and added that SafeEffect was developing a modified system that could be used on Hilux vehicles, which are common in South African mining.

The company is assessing several other vehicle applications but Mr Johnsen said he would be wary before committing more funds.

He said the company’s aim was to get customers to fund its development activities.

Mr Johnsen’s cautious planning contrasts with the company’s troubled past under former chief executive Vin Morley.

SafeEffect listed in 2002 after raising $3 million, less than it had planned.

It then proceeded to spend its cash faster than it had anticipated, in part through a flurry of marketing and R&D initiatives that were meant to rapidly globalise its technology.

Its stock was suspended in 2003 after it was unable to complete a rights issue, which was supposed to have been fully underwritten.

“The thing that’s different about SafeEffect is that we have all that history but we have a product that is being manufactured and delivered to customers,” Mr Johnsen said.

The tidying-up process includes a scrip takeover of SafeEffect Technologies International, which owns 49 per cent of the intellectual property.

SafeEffect is also finalising a $3 million capital raising.

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