IPO candidate Carbonxt taps coal power clean-up News04 Dec 2017

An little-known United Nations convention which came into force in August is behind the business case for IPO candidate Carbonxt Group, which is raising $10 million to help it expand to meet demand for its mercury-stripping technology.


Its products remove the harmful toxin mercury from waste water and flue gas emitted from coal-fired power stations. While the Australian company has several other applications too, its emissions control from coal-fired power which has built a strongly growing business in the US, said chairman Matthew Quinn, a former managing director of Stockland.


Backed by billionaire property developer Lang Walker, the largest shareholder, Carbonxt is going public to raise funds to set up production facilities in the US to increase volume and meet customer demand, Mr Quinn said. The offer, managed by Shaw and Partners, of 14.3 million shares at 70¢ each opened last Thursday and closes December 7. At the issue price, the company will have a $51.1 million market cap once it lists, scheduled for December 20.


"We've had very strong demand already," said Mr Quinn, adding that despite the US focus of the business, it "makes sense from a capital perspective" to list in Australia where Carbonxt is already an unlisted public company.


The US already has stringent regulations for mercury control, but the Minamata Convention – named after a city in Japan that suffered a devastating mercury poisoning event – should open up opportunities for Carbonxt worldwide, including in Australia, as it requires signatories to put in place mercury removal strategies from air and water within a few years.


"Australia is a signatory to that Convention and therefore longer term it may be that we have applications in this country as well," said Mr Quinn, who is also chairman of software provider Class Ltd and a director of CSR.

"But certainly in Asia, in China, Germany, anywhere where there's a large fleet of coal-fired power stations we would have a utility."


Mr Quinn said that while the phase-out of coal fired power stations and fossil fuels "will happen", even in the US, it was "a responsible thing to do" to make them environmentally safer in the meantime.

"It is going to take 20 or 30 years in reality for that to happen and for renewables to take over the load factor, and our role as an organisation in servicing those power stations is to make them as environmentally responsible as they possibly can be whilst they are in operation."


In an emerging strand to the business, Carbonxt has developed a process to manufacture activated carbon from a biomass waste product. The process takes a waste product currently going into landfill to convert into a finished product for use in pollution control.


None of the existing shareholders will reduce their holding as part of the float. The board and management, led by managing director Warren Murphy, will own about 4.5 per cent of the stock after the listing.


Source: AFR




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