Belmont diversified industrial services provider Paladio Group Ltd is expanding into the environmental solutions market.
Belmont diversified industrial services provider Paladio Group Ltd is expanding into the environmental solutions market.
The company is in joint venture negotiations to create an environmental services company to meet the needs of the resources and oil and gas sectors.
The group recently signed a binding MOU with US-based environmental solutions company Remtech to form the jointly owned Australian-based entity, Remtech Environmental Solutions Pty Ltd.
The entity will provide environmental solutions and services in Australia and overseas in areas such as environmental construction, soil remediation, water and sludge treatment, site containment and encapsulation.
Paladio intends to raise $8 million via the issue of about 11.5 million shares at 70 cents each to assist in funding the transaction and for working capital purposes for its wholly owned subsidiary, McFee Pty Ltd.
Paladio’s executive chairman Dick Wright said the opportunity to partner with Remtech was timely and of strategic benefit.
“The addition of RES to the Paladio group complements the company’s stated objective of diversifying its on site suite of services,” he said.
Paladio’s CEO Rob Franco said there were a number of opportunities for RES both in Australia and abroad.
“RES will get the exclusivity of those projects outside of the countries which Remtech is currently operating,” he said. Paladio will own a 51 per cent stake in RES and will issue 3 million shares to Remtech.
Paladio will commit US$3 million (A$4 million) into RES, of which US$1.5 million (A$2 million) will be utilised to acquire a direct thermal desorption unit from Remtech.
The remaining US$1.5 million (A$2 million) will be utilised as an interest-bearing revolving line of credit to be used by RES as working capital.
Paladio will issue a further 3 million shares to Remtech if the new business achieves a US$1 million (A$1.4 million) Net Profit After Tax within its first 14 months.
The Remtech transaction and capital raising are subject to shareholder approval at a meeting expected to be held in April. Remtech operates in the United States (where RES may still act as a sub-contractor to Remtech), Mexico, Africa and the UK.
A number of Remtech’s advanced projects under consideration in the USA, Asia and Europe will be performed through RES if its bids are successful.
Paladio Group listed on the ASX in April last year and consists of Novacoat (WA) Pty Ltd and McFee Pty Ltd.
The group has about 250 combined staff but the company declined to disclose the number of proposed RES staff.
