Marine Investor Ceanic Seeking $20 Million
Marine Investor Ceanic Seeking $20 Million
CeAnic Limited, a new marine technologies company, has launched a $20 million initial public offering, providing all New Zealanders a unique opportunity to invest in one of the country's biggest and fastest-growing sectors.
Chairman John Storey said CeAnic would capitalise on the foundation work that has been developed and nurtured by innovative, entrepreneurial New Zealand businesses in the marine sector.
"Many existing marine companies have grown through hard work and persistence. CeAnic will assist their future growth and development by providing the resources, knowledge and experience of our company and our team of internationally experienced directors and managers."
As well as Mr Storey (the former chairman of the NZ Dairy Board, NZ Dairy Foods and NZ Dairy Group), CeAnic's board of directors includes: Fran Wilde, former chief executive of the NZ Trade Development Board; Wayne Shaw, an experienced marine businessman; Jesper Bank, an Olympic and World Champion yachtsman with strong European business ties; and Prem Maan, an experienced investment banker. The company's chief executive is Hans Peder Wagner, the former head of the Danish Trade Commission in New Zealand.
CeAnic will invest in four fast-growing sectors of the marine industry: marine craft, aquaculture, marine tourism and marine-based renewable energy.
While the success of New Zealand superyacht manufacturers and the America's Cup has heightened international interest in the local boatbuilding industry, this is just one of a wide range of marine industries targeted by CeAnic.
The company has already taken 20 per cent stakes in four innovative companies: * Saba Yachts - Recently began business as a boatbuilder and is currently building its first deep-hulled, 80-foot "expedition ship", which will be equally at home cruising the Hauraki Gulf or up to the Pacific Islands. Saba aims to make NZ the international leader in building these vessels. * Smartships - A start-up marine design company which will own copyright designs to innovative marine craft. Smartships will access the skills of internationally renowned designer John Harrhy. * Dynamic Marine Systems - A start-up company that will develop marine software and system operations. For example, the company will work with the associated Marine Centre of Excellence to develop ShipFix, a global positioning system to be used by vessels requiring accurate hovering capability over a fixed position. This technology has already received a $100,000 grant from Technology New Zealand. * Guardian Capital Finance - Debt financing company for the marine industry chaired by well-known company director, and former Countrywide Bank chief executive, David Wolfenden.
CeAnic is seeking to raise $15 million in ordinary shares and $5 million in mandatory convertible notes. The company has the ability to raise an extra $10 million in shares and notes should demand justify. The minimum investment is $5000. A stock exchange listing is not being sought.
In addition to the ordinary shares and MCNs, CeAnic will issue 7 million "founder shares" to Guardian Capital Investments Ltd, a company ultimately owned and controlled by interests associated with Wayne Shaw and fellow marine industry veteran John Harrhy, in return for 20 per cent of the shares in Dynamic Marine Systems, Saba Yachts, Smartships and Guardian Capital Finance. One million founder shares will be issued to Guardian Capital Finance, which is owned by Guardian Capital Investments, in return for 20 per cent of that company.
The Founder Shares were issued to encourage the ongoing commitment of Mr Shaw and Mr Harrhy and allow CeAnic to pay for the initial stakes it is taking in the four companies belonging to interests associated with the founders. Both men have a proven track record in the marine industry and this structure incentivises them to grow their businesses, in turn creating wealth for CeAnic investors.
"Capital raising exercises by other companies often amount to an exit strategy for the founders," Mr Storey said. "In such cases, much of the value of the business disappears when the founders sell out.
"CeAnic's structure ensures that Mr Shaw and Mr Harrhy have an incentive to remain active in the business."
The founder shares will only convert to ordinary shares in five years' time after independent valuations confirm that the value of CeAnic has increased by at least 40 per cent. The founder shares will rank alongside ordinary shares in voting rights and entitlement to dividends, but will rank behind ordinary shares (and MCNs) in the event of CeAnic's liquidation.
Applications for ordinary shares must be for a minimum of 5,000 shares of $1 each, and in multiples of 1000 shares afterwards. Half the value of the shares (50c) is payable on application with the other half payable on September 1, 2003. Applications for mandatory convertible notes (MCNs) must be for a minimum of $5000 and thereafter in multiples of $1000.
CeAnic reserves the right to accept oversubscriptions of ordinary shares and MCNs to a total combined value of $30 million, provided that the maximum number of MCNs does not exceed 10 million.
The MCNs are unsecured and subordinated fixed interest debt instruments, which convert after five years to ordinary shares. The interest rate on the notes will be fixed at April 17 at a minimum of 7.25 per cent per annum, and payable quarterly. The notes will convert at a 20 per cent discount to the asset backed value of CeAnic ordinary shares or, if the shares are listed by then on a stock exchange, the average value of the share price of CeAnic ordinary shares that have been traded in the preceding 20 business days.
The public offering, which is not underwritten, opens today (March 12) and will close April 17.