SeaDragon to raise $5M via discounted rights, placement

SeaDragon to raise $5 mln via discounted rights issue, placement to fund transition to Nelson factory

By Paul McBeth

July 2 (BusinessDesk) - SeaDragon, which announced an overhaul of its board this week, wants to raise at least $5 million through a discounted rights issue and private placement to help fund the transition to its new Nelson manufacturing facility.

The Nelson-based company intends to raise the funds through a pro-rata rights issue to existing shareholders and a potential private placement, it said in a statement. The terms of the offer haven't been finalised, but the board anticipates it would be 50 percent of the 1.6 cent closing price on June 30, implying a price of 0.8 cents per share, which may be underwritten. The shares rose 6.7 percent to 1.4 cents.

The new capital would be in addition to a $2.5 million convertible loan from cornerstone shareholder BioScience Managers, and is needed for the company's new Omega-3 fish oil refinery in Nelson, due to be commissioned later this year, which has gone over budget, stretching SeaDragon's balance sheet.

SeaDragon reported a $2.8 million loss for the year ended March 31, compared to a profit of $431,000 in 2014, following investment in new sales, marketing, and staff ahead of the refinery start-up. The company also said it had secured further squalene raw materials that should ensure squalene sales for the 2016 financial year are ahead of 2015.

(BusinessDesk)

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