Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


SeaDragon raises $4.1m; signs key refinery agreements

29 January 2014

Australasia’s largest refiner and blender of high-quality fish oils, SeaDragon (NZX:SEA), has received a very strong investor response to its Share Purchase Plan (SPP), raising $4.1m well in excess of its $2.5 million target.

SeaDragon has also executed a Heads of Agreement with Orange Building Group Ltd the prospective landlord of its new Nelson-based fish oil refinery and a contract with Desmet Ballestra for the supply of fish oil refining equipment. The new capital and the agreements ensure the company is in a strong financial position and remains on track for the completion of the refinery in the fourth quarter of this year.

SeaDragon Chairman Dr Doug Wilson said: “The strong investor support for the SPP, which closed on Friday bringing to a conclusion a highly successful three month capital raising programme, represents a significant endorsement of SeaDragon’s management team and our strategy to expand our Omega-3 fish oil refining activities.

“After careful deliberation the SeaDragon Board has resolved to accept all applications for the SPP as it will allow SeaDragon to put in place a capital structure that will see us through our next phase of development. In addition, we wanted to reward the loyalty investors have shown to SeaDragon throughout this process. We are delighted with the outcome.”

The capital raised from the SPP combined with the $2.0 million raised with a placement to eligible investors in November 2013 and the $2.5 million raised from the sale of its stake in Snakk Media[1] will be used to retire debt, provide working capital support and fund the new refined fish oil plant.

SeaDragon launched the SPP just before Christmas, offering all shareholders the opportunity to buy up to $15,000 of shares at 1.6 cents per share, the same price offered to eligible investors who took part in the share placement.

SPP shares will be allotted today (Wednesday 29 January 2014) and holding statements will be despatched on Friday 31 January 2014.

SeaDragon Chief Executive Officer Ross Keeley said: “With key agreements for the refinery now completed we are looking forward to getting to work on the plant, which is the first step towards realising the significant opportunities we see in refining and distributing high-quality New Zealand-sourced Omega-3 fish oils.”

The Heads of Agreement with Orange Building Group Ltd covers the construction of a new purpose-built refinery in Stoke about one kilometre southeast of SeaDragon’s existing Nayland Road site. Orange Building Group Ltd has agreed to fund and construct the new building according to SeaDragon’s specifications. It has also agreed to lease the premises to SeaDragon for an initial term of ten years with two rights of renewal for an additional twelve years, as well as unoccupied surrounding land enabling expansion at a later date.

Meanwhile, the agreement concluded yesterday with Desmet Ballestra, a world leader in engineering and the supply of plant and equipment for the oils, fats and animal feed industries, covers the supply of fish oil refining equipment.

SeaDragon will outfit the new refinery for a total projected cost of around $4 million. This sum includes the cost of the Desmet Ballestra equipment.

When completed, the new plant will have the capacity to produce in excess of 5000 tonnes of refined fish oil and could generate annual sales worth as much as $50 million. The plant will produce oil high in Omega-3, primarily from Hoki, sourced from the clean Southern Ocean fishery. Such oil offers SeaDragon’s customers the opportunity to differentiate their products from the anchovy-based oils which currently represent 83% of world Omega-3 fish oil supply.

“The new site in Stoke offers a number of significant advantages over the Richmond site we had earlier earmarked for development,” Mr Keeley said. “The proposed lease offers better terms and the site offers much better infrastructure, notably better transport connections as well as access to a reticulated potable water and waste water supply. It also ensures minimal disruption for staff due to its proximity to the existing site as well as reducing business complexity.

“Additionally, Orange Building Group Ltd also owns our existing Nayland Road site, where we expect to continue to manufacture our shark liver oil products. The landlord understands the needs of our business including the need, over the longer term, to merge the two sites. Orange Building Group Ltd is an ideal partner for SeaDragon’s next phase of growth.”

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news