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Sunrise Energy Metals (ASX:SRL) plans acquisition and demerger

Industrial
ASX:SRL      MCAP $55.49M
11 May 2021 12:00 (AEST)
Sunrise Energy Metals (ASX:SRL) - CEO, Sam Riggall

Source: The Australian

Sunrise Energy Metals (SRL) plans to take full ownership of its graphene oxide membrane development joint venture company, NematiQ.

In 2018, Sunrise and Ionic Industries partnered up and established NematiQ to develop graphene oxide (GO) membranes for water treatment applications. The company initially had a 75-per-cent stake in the joint venture, before increasing its interest to 83.2 per cent in 2020.

Since 2018, NematiQ has developed a process for manufacturing GO, which can be applied to a membrane support to create a graphene oxide-based nanofiltration membrane (GO-Membrane). The GO-Membrane manufacturing process has already been demonstrated on commercial-scale industrial equipment.

Sunrise has reached an agreement with Ionic, under which it will acquire the remaining 16.8 per cent interest in NematiQ which it doesn’t currently own. This will consist of 116,667 shares, as well as a shareholder loan of $340,000 which NematiQ owes to Ionic.

In consideration, Sunrise will issue 740,741 of its fully paid, ordinary shares, worth roughly $2 million combined, to Ionic. Ionic has agreed to a voluntary escrow of the Sunrise shares until September 30, 2021.

As a result of the acquisition, NematiQ will become a wholly owned subsidiary of Associated Water, a Sunrise Energy Metals company

In related news, Sunrise Energy Metals has scheduled a meeting to seek shareholder approval for the demerger of its Water Business. The meeting is scheduled for the second quarter of the 2021 calendar year, with a goal to implement the demerger in the third quarter.

The company’s proposed demerger would occur through a spin-out of the Water Business, by way of a capital return. This capital return would consist of a pro-rata in-specie distribution of shares in Clean TeQ Water to Sunrise shareholders. 

If the proposed demerger proceeds, NematiQ will be a part of the demerged Water Business within the Clean TeQ Water group of companies. 

Sunrise Energy Metals is up 0.19 per cent, trading at $2.70 per share at 10:32 am AEST.

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