MyEco Group Raises $1.6m to Fund Cost-Cutting Restructure and Growth
MyEco Group has secured $1.6 million through unsecured convertible notes to support a strategic operational restructure aimed at reducing costs and scaling production. This capital raise complements existing cash reserves and aims to improve margins while minimising shareholder dilution.
- Raised $1.6m via unsecured convertible notes from sophisticated investors
- Convertible notes carry 10.5% annual interest, convertible after 12 months
- Operational restructure expected to cut $2.5m–$3.0m in annual fixed costs
- Restructure includes production scaling in Southeast Asia and asset rationalisation
- Directors subscribed $355,000 subject to shareholder approval
Capital Raise to Support Strategic Restructure
MyEco Group Ltd (ASX: MCO), a developer and manufacturer of sustainable packaging, has announced a $1.6 million capital raise through the issue of unsecured convertible notes to sophisticated investors. This funding round is designed to complement the company’s recent operational restructuring efforts and bolster its growth plans amid challenging global market conditions.
The convertible notes carry an attractive 10.5% annual interest rate, paid quarterly, with a three-year term. Investors can convert the notes into shares at a 15% discount to the 14-day volume weighted average price (VWAP), subject to price caps, starting twelve months after issuance. The notes also include provisions for early redemption by the company, providing flexibility in capital management.
Operational Restructure to Drive Cost Savings
The proceeds will fund one-off costs associated with an operational restructure expected to reduce annual fixed costs by between $2.5 million and $3.0 million. Key initiatives include scaling production capacity through strategic partnerships with converters in Southeast Asia, rationalising manufacturing assets in Malaysia, and relocating pilot production equipment from Melbourne to the commercial plant in Nanjing, China. Additionally, the company plans to move its head office and product development centre to lower-cost premises in Melbourne.
These measures aim to streamline operations, improve product margins, and increase supply chain flexibility, positioning MyEco Group to better meet demand across different geographies while minimising capital expenditure.
Shareholder Support and Financial Position
Notably, $355,000 of the convertible notes have been subscribed by company directors, including CEO Richard Tegoni and other board members, subject to shareholder approval at the upcoming Annual General Meeting. This insider participation signals confidence in the company’s strategic direction.
MyEco Group’s current cash position stands at $2.0 million as of 30 April 2025, supplemented by an unutilised $1.0 million secured debt facility. The new capital injection is expected to provide a solid financial foundation to execute growth initiatives while protecting shareholder value by minimising dilution.
Looking Ahead
CEO Richard Tegoni expressed optimism about the company’s trajectory, highlighting the focus on margin improvement through refined sales strategies and cost-effective manufacturing. The company aims to achieve positive EBITDA in the medium term, leveraging the operational efficiencies and enhanced production capabilities enabled by the restructure.
While the convertible notes offer investors a structured opportunity to participate in MyEco Group’s growth, the timing and full realisation of cost savings remain subject to execution risks. Market participants will watch closely how these initiatives translate into financial performance in the coming quarters.
Bottom Line?
MyEco Group’s convertible note raise and operational overhaul set the stage for a leaner, more scalable business—but execution will be key.
Questions in the middle?
- How quickly will the operational restructure deliver the targeted $2.5m–$3.0m in annual cost savings?
- What impact will the convertible notes conversion have on share dilution and shareholder value?
- How will strategic partnerships in Southeast Asia influence MyEco Group’s production capacity and margins?
