Money goes to waste technology

ONE of the market's hottest stocks, Environmental Solutions International, is set to launch a "several hundred million" dollar fund to pay for production of portable units that turn sewage into oil and gas.Sachlan Fraval, a director of ESI - which has trebled in price in a week - yesterday said Securities International was close to kicking off a "several hundred million" dollar debt raising on behalf of his company.
The debt raising would be a medium-term note program offering a capital-guaranteed return from the operation of ESI's Enersludge portable waste-treatment units.
"What we are looking at is an infrastructure play in the sewage space," Mr Fraval said.
"Those investors would own the capital equipment that would be put in to use. They would have a capital-guaranteed return from the equipment."
The money raised would not be factored in to ESI's balance sheet, Mr Fraval said.
The company has just $1.1 million in cash and no other current assets.
ESI went into administration in 2004 and had to sell its wastewater treatment to engineering giant Tenix but retained the Enersludge technology.
The technology uses a slow heating process to turn solid sewage waste into energy sources such as synthetic gas and oil. It was developed in the 1980s by researchers at Germany's Tubingen University, before being sold to the Canadian Government.
ESI bought it from Canada in 1989, working with the inventor to develop processes and applications.
Prior to going into administration last year, the company had built two demonstration Enersludge plants. One was operated by the Water Corporation of Western Australia (WAWA).
WAWA shut its plant in 2002 for economic reasons.
A WAWA engineer who had been involved with the Enersludge plant was quoted this week on an eco-news website saying that it had performed well, with "30-33 per cent of the waste converted into oil".
Mr Fraval's Rofin Australia, a specialist lighting company, took control of ESI last month, buying 83 per cent of the company's stock at 0.1c a share.
The shares hit 60c this week and start today's trade at 47.5c. They were worth just 14.5c last Thursday - representing a rise of 227 per cent.
The company currently has no managing director, although Mr Fraval said he hoped to appoint one shortly.
He also suggested that a deal to access Sydney's sewerage system was in the offing. In addition, "a number of countries" in Asia were interested in the technology.
The Daily Telegraph