Green Distillation Technologies, an Australian unlisted public environmentally friendly tyre-disposal firm, is close to finalizing an AUD 20m (USD 14m) capital raise to complete construction of local plants but is receptive to further approaches from investors or advisors for global plant development opportunities, CEO Craig Dunn said.
The Melbourne-based company is in advanced discussions with two unnamed Japanese trading houses it has been negotiating with for some months as well with an unnamed Australian party to raise AUD 20m in debt and new equity, Dunn said.
He declined to reveal the equity component but noted it would give the investor a 20% stake in the firm, with an option to creep in 12 months. The round is expected to close by 31 March this year and proceeds will be used to complete its Warren, New South Wales-based production facility and construction of another plant in Toowoomba in Queensland, Dunn said.
The company is also looking to set up plants in Philadelphia and Texas in the US and would welcome proposals from investors as well as potential joint venture (JV) partners, Dunn said. Ideal JV partners include waste management recycling and oil refinery firms, he said, noting it is already in talks with some.
The company is keen to expand offshore because there is more investor appetite and government support for environmentally friendly initiatives than at home, Dunn said, noting that the company is in talks with the City of Philadelphia to establish a plant there and the City is making introductions to potential JV partners for Green Distillation. There has also been interest from potential JV partners in Texas, he added.
Meanwhile, Green Distillation is continuing to investigate similar opportunities in other markets like the UK and Middle East, as told to this news service last September, Dunn noted. An initial public offering (IPO) continues to remain an option for the company and will be discussed at its June board meeting, but there is no imminent plan to list, especially given the current capital raise, he added.
Established in 2009, Green Distillation Technologies has raised some AUD 33m to date, mostly from individual shareholders, but also from government grants, Dunn said. It has some 488 shareholders with an unnamed investment group in which Dunn and Chief Operating Officer Trevor Bayley are shareholders, owning some 28% of the company, the CEO said.
Green Distillation Technologies solves end-of-life tyre problems by converting rubber tyres into bio-oil, carbon and steel, via a ‘destructive distillation’ process, and was the first Australian company to win an Edison Award for innovation in 2015, Dunn said.
It has no comparable peers as other tyre recycling companies use different processes, Dunn said, citing as examples, New South Wales-based Tyrecycle, Pearl Global [ASX:PG1] and Titan International [NYSE:TWI].
While it has some similarities with the more commonly-used pyrolysis process, there are significant differences in its heat management and control systems as well as in the destruction and reformation of the molecular structure of the tyre, which delivers both process and product improvements, Dunn explained.
This article was first published by Louise Weihart in Sydney for https://www.mergermarket.com. Reproduced here with permission.