(Alliance News) - Eqtec PLC on Friday said it has cancelled a share subscription with Verde Corporation Ltd after the deadline for payment passed.
Eqtec shares fell 20% to 1.12 pence each in London on Friday afternoon.
The Cork, Ireland-based thermochemical conversion technology company announced in February that new strategic investor Verde was to invest GBP1.5 million.
In April, the subscription deal was amended. Under the new deal, an initial subscription for 21.3 million shares at 2.00 pence was agreed upon. This was to be followed by a second subscription for 18.9 million shares at 5.00 pence each.
The two firms agreed to delay payments until no later than May 16.
The deadline has since passed and no funds were received by Eqtec. Eqtec directors therefore consider Verde to be in default of the subscription letter which has now been terminated.
"As a result of the subscription termination, the agreement for conversion of debt into equity by significant shareholders Pitcole Ltd and Altair Group Investment Ltd, which was conditional upon the Verde subscription, will not be executed," Eqtec said.
Discussions are now ongoing to secure an alternative longer-term financing solutions with no conversion rights, for which a non-binding term sheet has been agreed.
By Elijah Dale, Alliance News reporter
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Eqtec (EQT)