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.