Australian wave power firm Carnegie Clean Energy said it has developed a proposal to recapitalise the company, following the appointment of administrators in March this year.
Recapitalisation proposal has been developed with funding and support from two of Carnegie’s key stakeholders, Mooney & Partners and Asymmetric, who together have provided aggregate funding of $500,000 to support Carnegie through the administration process.
The company plans to raise a minimum of $5.5 million (before costs) and a maximum of approximately $11.5 million (before costs).
The funds raised from the offer will be utilised for the development of the CETO Technology, corporate overheads, operation of the Garden Island Microgrid, payment to the Creditor’s Trust, costs associated with the offers and working capital purposes.
On completion of the ‘Recapitalisation Proposal’, the directors believe that the company will have sufficient funds to satisfy short and medium term working capital requirements. However, the development of the CETO Technology may require additional financing in the future in order for research, development and commercialisation of the technology to progress at a competitive rate.
With the failed EMC business now removed, the directors believe that Carnegie will be much better placed to deliver its core business objective – the development and commercialisation of the CETO technology, with a significantly lower capital requirement.
Carnegie was unable to achieve the desired level of financial performance from the EMC Business, which consumed considerable amounts of the company’s capital, and was unsuccessful in its efforts to complete a divestment of the EMC Business to offset losses from that business unit, eventually leading to the appointment of the administrators in March 2019. The capital consumed by the EMC Business, also left Carnegie unable to pursue the Albany Wave Energy Project (AWEP).