Neptune Marine Services Limited announced details of a $2.5 million Initial Public Offering (IPO) and hopes to list on the ASX in March 2004.
Perth-based Neptune plans to use the proceeds of the IPO to internationally commercialize its breakthrough technology which produces a "dry" weld underwater and in-situ to the same standards achievable through normal dry welding on land.
Known as "Neptune Dry Welds", the technology has been successfully used in Australia on ships and on a hydro electric project in the Philippines and is more advanced than existing underwater "wet welds".
Prominent international class societies including the American Bureau of Shipping, have already approved the Neptune process for use.
"Such certification gives the process the opportunity to capture a slice of the global underwater construction and engineering market estimated to be worth in excess of US$10 billion a year by 2005," Neptune's Executive Director, Mr Andrew Harrison, said today.
"For insurance obligations, the technology enables the structural integrity of commercial fleets to be met on a more time and cost efficient basis. It also helps owners meet increasing and tougher safety regulation of marine facilities, and ship movements at sea and in port," Mr. Harrison said.
"Our initial focus will be repairing ships in Australia, and also Singapore - the third largest port in the world by volume and tonnage," he said.
"Once established in these key markets, we plan to expand to the United States and Europe, in parallel with further research, development and licensing initiatives.
"Underwater repairs worldwide are a multi-billion dollar a year business and our objective is to win a fraction of that, including Australia's massive offshore oil and gas industry."
Among its major benefits, the Neptune technology:
Terms of the Initial Public Offering (IPO)
The IPO plans to raise a total of $2.5 million through the issue of:
Mr. Harrison said the IPO provided for oversubscriptions of up to 5 million shares at 20 cents each and 2.5 million free attaching options, to raise a further $1 million.
Fully subscribed, the Offer and oversubscriptions would raise a total of $3.5 million. The minimum application is 10,000 shares.
The Options are exercisable at 20 cents each on or before December 31, 2010.
The Offer opens on February 6, 2004, and is due to close on 8 March.
Neptune expects to list on the ASX by March 22, 2004 with total ordinary shares on issue of 29.9 million, including 17.4 million currently on issue, plus 18.3 million options.
Strong market potential
"The Neptune underwater welding system was developed to dramatically improve conventional offshore, marine and oil and gas maintenance practices through developing a low cost, underwater welding repair system across these industries to a dry weld standard," Mr. Harrison said.
"We have achieved that objective and patents are now pending in Australia, Europe and the United States, with Neptune in an ideal position to commercially exploit the significant marine welding industry," he said.
"The Company will source a significant part of its business initially from ship repairs able to be undertaken at sea, as well as during loading or unloading and normal scheduled berthing, to minimize a ship's repair downtime and cost.
"The technology is equally applicable to major installations such as the submerged structures in nuclear plants, subsurface pipelines, jetties and piers.
"It can be used on water feed lines and tanks at inland mining operations, toxic lines and environments which need a fully contained welding arc for safety reasons - such as workplaces with flammable and volatile gases."
The completed weld does not suffer the limitations of wet welds where hydrogen embrittlement from gas trapped in the weld, limits weld quality and duration.
The Neptune system can operate at depths of up to 200 meters, but most work is expected to be undertaken at around 50 meters or less.
The offer of the Neptune securities will be made in a copy of the Prospectus lodged with the ASIC on January 29, 2004. Anyone wishing to acquire the securities will need to complete the application form that will accompany the Prospectus.
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