WA stocks seek new lease of life

WESTERN Australia has a long history of small listed companies changing or diversifying their activities into new and unexpected areas, and four more have recently joined the club. The four companies – Fast Scout, Harrington Group, Aust-ralian Development Capital and Biron Capital – illustrate the diverse changes that can occur. Harrington has entered into an agreement with US company Sun Biomedical Laboratories to acquire control of an oral fluid (saliva) testing tech-nology that is used in illicit drug identification, in situations such as police roadside testing, prisons, the military and professional sports. Harrington initially will acquire a 40 per cent stake in Sun, in exchange for 12 million Harrington shares, and will have an option to acquire the remaining 60 per cent stake by June 2006. It valued the entire deal at around $3.7 million. Harrington managing director Peter Boonen said the acquisition would complement its existing business, which is focused on the devel-opment of ‘less lethal’ weapons. Listed cashbox Fast Scout has announced plans to move into the mining industry by acq-uiring Hume Mining, which has a portfolio of uranium, gold and iron ore properties. Hume is a wholly-owned subsidiary of Central Exchange, which is one of several com-panies – along with Altera Capital and Sofcom – either controlled by or associated with Fast Scout chairman Farooq Khan. Fast Scout, Altera and Sofcom are all suspended from trading pending potential recapitalisations. To support its move into mining, Fast Scout has appointed geologist Shanker Madan as a director. To fund the deal, it is investigating options for raising $2 million. In this regard, the company has left its options wide open; it said the capital raising could be a placement, a share purchase plan or a rights issue, or a combination of the above. In addition, it said its 69 per cent shareholder, Data Base Systems, is planning to sell 25 million of its 71 million shares to create a more liquid market for its shares. Fast Scout previously described its main activity as Internet security software but last year it generated sales revenue of only $27,411 from this activity. Australian Development Capital, chaired by Blakiston & Crabb partner Michael Blakiston, gained approval from its shareholders for the acquisition of mineral explorer African Energy Resources and an associated $1.15 million capital raising. Shareholders also approved a change in the company’s name to Energy Ventures. ADC previously had a technology focus, investing in collagen producer CollTech Australia and gas technology developer Cool Energy. It said the latest move satisfied its investment criteria, which involved early stage invest-ments that can be developed in their own right or taken to market via a separate listing. African Energy has applied for eight exploration titles for uranium, coal and coal bed methane in Zambia, Malawi, Mozambique and Botswana. Biron Capital has a long and varied history and is best known for its foray into the manufacture of artificial emeralds in the 1990s. More recently it was run from Sydney and provided mezzanine funding to the property industry. In future it will be known as Biron Apparel, reflecting its recently completed $37 million acquisition of the Ed Harry men’s clothing chain and the Physico women’s clothing wholesaler.

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