Richard Irving

The later-stage wastewater treatment technology stock Emefcy is poised to embark on the next phase of its corporate strategy with full-scale commercial entry into the China market in the wake of a successful capital raising.

Emefcy announced yesterday it had raised $A31.6 million after placing 49.4 million new ordinary shares at $0.64 cents a share – a 17% discount to the 30-day volume weighted average price of $0.77 cents and a 10% discount to the last sale price of $0.71 cents on 19 July. It takes Emefcy’s total capital raising to $45 million since listing on the ASX late last year.

A strong and diverse group of strategic investors from China and several blue chip global funds in Hong Kong, Singapore, US and Australia are the cornerstone investors in the placement that was more than two-and-a-half times oversubscribed.

Emefcy, which is turning old water treatment technology upside down with its Israeli-based technology, also announced the signing of advisory agreements with several key China-based advisors who will be critical to the implementation of Emefcy’s China strategy.

Emefcy executive chairman Richard Irving says: “Our China play is really starting to come together. We have leveraged pre-existing, reliable relationships and cultivated new relationships in China to gain preferred access to suppliers expected to meet quality and cost targets while minimising working capital requirements by carrying inventory risk.”

Emefcy has selected Shanghai Brightfield Chemicals, which already is a joint venture partner with several global industrial companies including BASF, Polyram, and Velox, as its leading supply chain advisor.
Emefcy, which is on the ASX Cleantech index, develops, manufactures and markets innovative, energy-efficient wastewater treatment solutions, and is currently producing second generation MABR-based (membrane aerated biofilm reactor) wastewater solutions.

Customer contracts have been signed in Israel, US Virgin Islands, and Ethiopia. Additional MABR based wastewater solutions from Emefcy’s extensive R&D operations are anticipated to be announced in the coming months.

Emefcy executive chairman Richard Irving says apart from the foray into China, the capital raising will also help fund its global sales and marketing activities and ongoing product development as well as its water as a service initiative.

He says the successful capital raising demonstrated the high level of investor support for the company’s strategy. “Interest has come from a range of geographies as well as a diverse group of investors, including significant cornerstone investors from China. We are particularly pleased to welcome on to the register a strong group of funds that have expressed very clear interest in Emefcy.”

Emefcy Non-Executive Director Ross Haghighat says: “The company’s announced launch into China and sale of water as a service is underpinned by strong strategic relationships that the company has been cultivating in China for some time.

“Our overall China strategy is now further buoyed by a number of blue chip investors with experience in China and in the global financial markets.”

The capital campaign was led by Henslow as Lead Manager, Empire Capital Partners and EAS Advisors acting as Joint Lead Managers.

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