Balcatta-based Safe Effect Technologies Ltd has converted the last of its remaining debt under a $9 million convertible note to shares, on the day former chairman Roger Cowan announced he would resign from the board on December 31.
Balcatta-based Safe Effect Technologies Ltd has converted the last of its remaining debt under a $9 million convertible note to shares, on the day former chairman Roger Cowan announced he would resign from the board on December 31.
The full text of a company announcement is pasted below
Advanced braking systems manufacturer, Safe Effect Technologies Ltd, has capped off a strong turnaround year with the announcement today that it has converted the last remaining debt under a $9 million convertible note issued last year to underpin the Company's recapitalisation and restructure.
Safe Effect said today (Monday) a final amount of $279,000 has been converted to shares at a 5c per share conversion price, representing the final stage of conversion of a total of $9 million of borrowings that have now been converted at this price.
The elimination of $279,000 of interest-bearing debt saves $17,902 of interest expense in the current financial year.
Safe Effect's Chief Executive, Mr Ken Johnsen, said the conversion of the balance of the convertible note was a further demonstration of increasing investor confidence in Safe Effect's prospects following strong performance over the past 12 months.
"This period has seen a significant turnaround in the Company's financial results, key board appointments and the successful implementation of a business plan which, subject to a number of factors, is targeting a maiden profit in 2006/07," Mr Johnsen commented.
The Company continues to make solid ground in sales of its unique braking system to major mining customers. As foreshadowed in earlier ASX releases, Xstrata's George Fisher mine took delivery of 15 brake sets in November, following the 35 sets delivered in September.
A number of new customers have commenced trials which, if successful, will see a further expansion of SIBS with new customers in Australian mining operations.
A Toyota Hilux fitted with SIBS has been submitted to the South African Bureau of Standards for testing and certification. Their certification of the brakes for use on South African roads and in mines is the pre-cursor to an anticipated rapid take up of the Company's products in this large mining market, where failsafe brakes are mandatory for personnel carrying vehicles underground.
"Discussions are advancing with a number of major companies in South Africa interested in utilising SIBS," Mr Johnsen said. "Some of these same companies are already using our products at their Australian operations."
The Company has also embarked on a new sales model under which it will take on responsibility of direct sales to national accounts and major customers. This revised sales model will deliver higher returns to Safe Effect and will assist the Company in reaching its stated objective of self sustaining cash flow and a maiden profit in this financial year. The Company's existing re-sellers and authorised installers will continue to support Safe Effect's efforts in markets that Safe Effect cannot service.
In addition, the Company is continuing to explore channels to broaden the product portfolio and develop additional revenue streams by designing braking solutions to meet the specific needs of customers. Negotiations for engineering contracts are ongoing with several customers including two vehicle manufacturers.
Board Change
Safe Effect also wishes to advise that Non-Executive Director, Mr Roger Cowan, will resign from the Board effective 31 December 2006. Mr Cowan was Chairman of the Company until he relinquished the position to Mr David Humann in August this year.
Mr Humann said: "Under Mr Cowan's stewardship, Safe Effect has completed a major restructure and recapitalisation, including the implementation of a new business plan under CEO Ken Johnsen which has seen the Company arrive it at current promising position. On behalf of the Board, I would like to thank him for his valued contribution to the Company during this period."
