19th Oct 2007 10:48
Environmental Recycling Tech. PLC19 October 2007 For Immediate Release Environmental Recycling Technologies plc ("ERT") (formerly 3DM Worldwide plc) (AiM:ENRT) Reorganisation of American Housing Licence ERT is pleased to announce the reorganisation of its American based modularhousing and construction licences. As was stated in the AGM statement dated 24 July 2007, considerable work hasalready been carried out by our North American licensee, Silkwood CorporationInc. ("Silkwood"), in respect of the US department of Housing and UrbanDevelopment ("HUD") programme and with the US Department of Agriculture. This project is now to be undertaken by Advanced Digital Components and SystemsInc., ("Advanced"), a special purpose vehicle established to pursue the modularhousing programme opportunity. Advanced has been granted a specific developmentlicence for this new programme with an option for a production licence to followsuccessful completion of the development phase. ERT have been informed that twotrial houses are under construction using components made using the PowderImpression Moulding (PIM) process. On exercising the production option Advanced will pay ERT royalties on any partsand components produced using the PIM process. Additionally, under the terms ofthe new licence agreement with Advanced, Advanced will assume all the costs ofdeveloping HUD products. ERT is not obliged to provide any support or ongoingwork. Following these developments, the Silkwood licence has been rescinded. Silkwoodhas agreed to pay $500,000 as settlement of the arrears of royalty fees due toERT. This settlement is due to be paid by the end of 2007. No revenue relatingto the Silkwood licence was accrued for in the 2007 interim accounts. In consequence of rescinding the Silkwood licence the Company has, throughmutual agreement, rescinded the project management agreement with Global TechInc. ("GTI"). The Company has negotiated a full and final settlement of $250,833with GTI for all amounts due as a result of the early termination of thisagreement. A prudent provision of £391,850 was made in the accounts for the year to 31December 2006 against the debt due by Silkwood as legal action was beingpursued. The net effect of all of the above settlements, at current exchangerates, will be a credit to the Income Statement of £122,086 for the year to 31December 2007. The Advanced PIM licence is exclusive to products and components designed aspart of the HUD programme and those that Advance has developed as part of otherbespoke proprietary building systems. The licence is limited to the NAFTAregion. The restructuring of the American PIM licensing position now allows ERT topursue interest it has received from other organisations in relation to otherhousing and construction products. In addition ERT has received confirmation from the Tanzanian Government thatthey are supporting the project application for European Union funding for theinstallation of a PIM production facility to produce low cost housing fromrecycled plastics in Tanzania. Niall MacKay the Chief Executive Officer of ERT said: "It is increasingly apparent the European construction industry offers thegreatest short-term potential for our company. This is also true of America.However, with our limited resources we are conscious of the fact that we arelikely to gain more by focusing our resources on our current opportunities inEurope. Given the interest in America and the appetite for modular housing there, webelieve the best way for the company to maximise value from this interest is viaa licence agreement. Additionally, where possible we will seek to limit theextent of the licence and ensure the licensee assumes all the productdevelopment costs. Consequently the project management agreement we had withGTI has unfortunately become redundant. I would like to thank GTI for all thework they have done to date in furthering the construction industry applicationsfor our PIM process in the USA. The recent correspondence with the Tanzanian Government is particularlyencouraging and I expect the project to now gather pace. The Board and I lookforward to providing the market with further commercial announcements in themonths ahead." ---ENDS--- For further information: Environmental Recycling Technologies PlcNiall Mackay (CEO) 01993 779 468 Evolution SecuritiesFergus Marcroft 0207 071 4300 GTH Media RelationsJade Mamarbachi & Toby Hall 0207 153 8035 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ENRT.L