Shares in Balcatta-based SafeEffect Technologies Ltd, have fallen almost 50 per cent today after the braking system developer and manufacturer resumed trading on the ASX.
Shares in Balcatta-based SafeEffect Technologies Ltd, have fallen almost 50 per cent today after the braking system developer and manufacturer resumed trading on the ASX.
At market close, Safe Effect's shares were at 6.6 cents.
The company has been suspended from quotation since August 2003.
SafeEffect has recently completed a convertible note issue of $9 million, the majority of which ($8.05 million) has been converted to equity at 5 cents per share over the last 35 days, with the capital raising to be used for working capital purposes.
The edited announcement is below:
Safe Effect Technologies Ltd, a developer and manufacturer of an improved braking system for vehicles used in mining and other harsh and high demand braking environments, will resume trading on the ASX on Wednesday the 5th of April 2006. The Company has been suspended from quotation since August 2003.
The resumption of ASX trading follows a major reorganisation of the Company's affairs with a new Board and management team in place, a re-capitalisation and the establishment of stable supply of the Company's products from its assembly facility in Thailand.
The Company recently completed a convertible note issue of $9 million the majority of which ($8.05 million) has been converted to equity at 5 cents per share over the last 35 days.
This capital raising provides working capital to allow the Company to transition from the product development phase to sustainable operation from product sales and other income.
The current outlook from the Company's internal forecasts of sales growth are that it can reach break even operation this calendar year followed by an expected maiden profit in the year ending 30 June 2007.
Major mining companies such as BHP Billiton and Xstrata are adopting Safe Effect's braking technology with the conversion of initial quantities of Toyota Landcruisers used in mining operations to use the brakes. The Company offers a retro-fit kit for Landcruisers that retails for over $10,000. Brake products under development for other vehicles and applications will add to the product portfolio.
Safe Effect's patented braking technology comprises an enclosed wet disc brake combined with a fail safe brake feature. The enclosed brake reduces significantly the maintenance cost associated with replacing standard brakes with great frequency on mine sites. The fail safe feature allows the mine vehicles to meet the ever increasing Occupational Health and Safety protocols of the major mining companies and contractors.
Safe Effect CEO, Ken Johnsen stated today, "The resumption of trading of Safe Effect shares on the ASX marks a turning point in the Company's history. It is a demonstration that after a period of sustained losses during the development phase the Company has moved into the commercialisation phase."
