Sealegs abandons rights issue, stock down 38%
Sealegs abandons rights issue, sending stock down 38%
Feb. 10 – Sealegs Corp., the maker of amphibious boats, abandoned plans for a rights issue because of the global economic slump. Its shares tumbled 38% to the lowest level in at least a decade.
“International uncertainty makes raising money to execute an expansive business plan unwise at this time,” chief executive David McKee Wright said in a statement. “Current economic conditions will not support an expansive business plan and as such the company is basing its plans around operating cash flows and existing cash reserves,” he said.
In November, the company lowered its forecast for full-year sales to a range of NZ$11 million to NZ$15 million, from a previous forecast of NZ$18 million. In September, McKee Wright predicted an operating loss for the year ended March 31 because of a “sudden and significant reduction in the rate of new orders.”
The slowdown comes amid a drop in demand in the luxury goods market, which has hit sales of high-end items such as so-called super-yachts in Monaco.
The shares fell 5 cents to 8 cents and are down 74% in the past 12 months.