SeaDragon raises funds to complete Nelson factory

  • 30/09/2015
(iStock)
(iStock)

By Paul McBeth

SeaDragon, the fish oil refiner, has raised $10 million to help fund the completion of a new factory in Nelson.

The company sold 1.25 billion shares and options at 0.08 cents apiece, raising $10.01m, which it will use to build its Omega-3 refinery and add a fractionation plant at a new site.

SeaDragon raised $9.01m in a rights issue and bookbuild, and another $1m through a placement to investors whose demand exceeded what was available through the offer.

"In yesterday's shortfall bookbuild, the company received demand for shares well in excess of the amount provided by the rights offer and was facing the prospect of having to scale bids," chairman Colin Groves said in a statement.

"After receiving expressions of interest from a number of qualifying wholesale investors, we decided to raise additional capital to give the company greater flexibility to pursue its growth plans."

SeaDragon got a boost earlier this week when health products maker Comvita said it would take a 19.9 percent stake in the company through the bookbuild, ensuring it would meet its minimum target of raising $5m.

The Te Puke-based company was also granted an option to buy $3m of shares at 0.8 cents each in full before October 1, 2017, subject to shareholder approval, and will enter into a supply agreement with SeaDragon as it looks to expand its health supplement range.

Mr Groves said Comvita's participation assured the success of the capital raising and "also put in place a partnership that will maximise the value of New Zealand's sustainably harvested local seafood resources".

The new capital is in addition to a $2.5m convertible loan from cornerstone shareholder BioScience Managers, which didn't participate in the offer.

Shares on issue will swell to about 3.13 billion from 1.88 billion. SeaDragon said a planned share consolidation has been delayed, and will be reconsidered at the close of the offer. The exercise price for the options is 1.5 cents.

SeaDragon shares last traded at 1.3 cents, valuing the company at $24.4m.

NZN