ECT’s Share Price Lifts Tuesday, Before Trading Halt News
Trading of shares in Environmental Clean Technologies Ltd [ASX:ECT] has been halted since Wednesday, pending the outcome of a meeting with an Indian mineral producer.
ECT is in the business of commercialising new coal and iron-making technologies which are capable of delivering both financial and environmental benefits.
Before the trading halt, ECT’s share price was trading up to 1.3 cents per share, with a one-year return of 30%. Its current market cap currently sits at $62.41 million.
ECT’s Shares Not trading any time soon
In an announcement made this morning, ECT exited its voluntary trading halt and entered a suspension from quotation.
The cause for the original halt in trading has not been formally specified by the company. However, it may be due to the fact the company is awaiting the outcome of a board meeting with NMDC Limited, an Indian iron producer.
ECT this morning informed investors it would enter and remain in voluntary suspension until 1 April 2019.
According to its filings to the ASX, the company has partnered with two Indian Government Public Sector Undertakings to advance the next stage of the commercialisation of its Coldry and Matmor technologies.
The partnership includes NLC India Limited, the country’s largest lignite miner and NMDC India, the country’s largest iron ore miner.
Revealed: Three In-House Small-Cap Stocks the Experts Are Watching in 2019. Download today.
NMDC had originally tabled a research collaboration agreement (RCA) with ECT for its most recent board meeting. However, according to ECT, this matter was not discussed and will need more time to complete the approval process.
It seems the RCA has been caught up in a web of bureaucratic red tape for some time. This is not the first instance of ECT entering into a trading halt pending a decision from NMDC.
In fact, this is the just the second time within two months.
Frustration from investors has continued to mount over the continuous trading halts, with ECT providing little information about why the RCA keeps being overlooked.
NMDC confirmed its board did not consider the RCA today, but restated their support for the project. They have appealed for further time to complete an internal approval process.
What’s next for ECT’s India project?
It is difficult to speculate what will happen with ECT’s now stalled India project. This cycle has continued for some years now in spite of the commitments given by NMDC.
Only last month did ECT’s chairman and COO travel to India to finalise the RCA. But today’s announcement sends a clear message that very little was finalised — at least on NMDC’s end.
The 1 April reinstatement date does give ECT just over two weeks to head back to the drawing board to draft an agreement NMDC will hopefully consider.
The company’s other option would be to sever dealings with NMDC and cooperate solely with NLC, who have already considered and approved the RCA.
Regardless of which they choose, investors will no doubt be watching the developments closely as the company has banked heavily on its India project.
More to come.
For Money Morning
PS: If you need help picking small-cap winners, our three in-house small-cap experts have revealed their top picks for 2019. Download the free guide today.