ZincOx to hand over 90% of business after fundraising fail

The AIM-listed company and its joint brokers Peel Hunt and FinnCap made what it said were intensive efforts over recent weeks to raise the minimum agreed amount of $5m that would have enabled it to reschedule its $57.1m debt owed to Korea Zinc, but sufficient interested investors could not be found.

Therefore, during the course of January and possibly February 90% of the wholly owned Korean subsidiary, ZincOx Korea (KRP) will be transferred to Korea Zinc by the issue of new shares.

ZincOx will now be debt-free with net cash of approximately £240,000 and its only other assets will be its proprietary technology "know-how", and industrial land in the USA and Turkey and a profit sharing interest in the Jabali zinc deposit in Yemen, which it ascribed no value due to security issues.

The company said it planned to continue trading as there are "parties interested" in developing others plants using its proprietary core technology, and as the 10% remaining share in the Korean business is still a valuable asset.

"If the zinc price returns to the level seen over the past four years, it could provide a regular cashflow that could be used for the generation of new projects and to cover overheads," it said.

Chairman Rod Beddows added: "We are obviously disappointed that we were unable to secure additional funding to retain 100 per cent interest in KRP.

"However, our ongoing interest in the Korean Recycling Plant is significant and may act as a building block for the company and a source of cash if the zinc price returns to more sustainable levels. The company has proven an exciting new technology and we look forward to potential partnerships for the development of new projects."

The board said they will announce their new plans soon, which could include raising cash to build a new business or winding down the business and selling remaining assets and returning cash to shareholders.