18th May 2016 08:32
LONDON (Alliance News) - Environmental Recycling Technologies PLC shares dropped on Wednesday after talks with its partners about developing an alternative method of disposing waste broke down after more than six months of discussions.
Environmental Recycling shares were down 13% to 0.0435 pence per share on Wednesday morning.
The news is a blow for the company as it continues to suffer from the impact of a weaker economic environment in the wider recycling industry and leaves the company holding discussions with "other interested parties" about developing new methods that are more suited to current conditions.
Environmental Recycling Technologies said back in October that it was addressing the "issue" of waste plastic and the ever-rising costs of alternative waste disposal methods, most notably landfill, as it tries to capitalise on its proprietary PIM process in the challenges of dealing with un-separated polymers and recycling processes.
The company was struggling to make commercial progress with its technology due to the weka conditions in the recycling market and was working with its joint venture partner, Axion Polymers, about how to provide technical support to its licensees and in finding new commercial opportunities for its technology.
Back in October, the company said marketing and servicing of its technology would need a greater resource than the company has, prompting it to search for a partner to help. The original plan was to acquire a business to help boost its capabilities in areas it currently lacks experience, but said it identified an alternative plan that did not require it to chase an acquisition.
Environmental Technologies said it the alternative business model would be developed subject to due diligence - but something has gone awry in the last six months.
On Wednesday, Environmental Recycling said: "Discussions regarding the development of an alternative business model, as referred to in the chairman's statement at the annual general meeting on October 30, 2015, have been terminated."
"Discussions are continuing with other interested parties with a view to securing the future of the Company and its PIM technology," the company added.
The company did not provide any further information, but shareholders will be concerned that new talks with other parties will take a long time based on the fact the talks that were terminated on Wednesday had been ongoing for longer than six months.
By Joshua Warner; [email protected]; @JoshAlliance
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