Aquaria 21 swims for dear life

By Nicholas Bryant

Friday 7th July 2000

Ken Wikeley has told Aquaria 21 shareholders he has not drawn his $250,000 a year salary as managing director for four months and would leave the stranded company as soon as a new business direction was secured.

"I've not just got upset shareholders here - I've got others on my back, including [Eric] Watson," Aquaria 21 managing director Mr Wikeley said at the company's annual meeting last week.

Entrepreneur Mr Watson had put $3.8 million into Aquaria 21 in its early days when it was considered an exciting investment for its Asian aquarium developments.

But last week Aquaria 21's board told shareholders the company has recently come close to receivership.

At its annual meeting a small turnout heard how their company's board had a tough job six weeks ago convincing its auditors to let it broker one final deal and sell its only remaining asset.

At a special meeting in March it was decided the company would change direction subject to the sale of assets for shares in Australian company Bliss Corporation.

But that deal fell over in May after Bliss Corporation claimed Aquaria 21 had not fulfilled its obligations, and the aquarium owned by Melbourne-based private company Oceanis experienced an outbreak of legionnaires' disease.

It is still intended that Aquaria 21 will change direction after the sale of the Shanghai Aquarium to Oceanis, the third member of the failed Bliss Corporation deal.

But the sale, for the bargain basement price of $US8.3 million, leaves Aquaria 21 with little room to move. At best it will have about $500,000 but managing director Ken Wikeley admitted it could be lower.

The sale price for the Shanghai Aquarium is so low because there is little demand in the market and Aquaria 21 is desperate to sell.

After a failed fundraising effort in 1998 when only $3.3 million worth of an available $18.75 million convertible notes were subscribed, the company had to take out a $US5 million loan.

That was the minimum amount needed to build the Shanghai aquarium.

The loan was due on the day of the annual meeting, June 30, but is being held over without penalty if shareholders decide in two weeks to approve the aquarium's sale. There is little doubt they will as Mr Wikeley told shareholders the only alternative was liquidation.

What money is left after the $US5 million loan is paid must be paid out to holders of the convertible notes which helped build the asset in the first place, a development Mr Wikeley said, in hindsight, should not have gone ahead.

Shareholders were sceptical about whether Aquaria 21 could find a new direction, raise more capital to fund it and restore faith in the company. But Mr Wikeley said there were two potential scenarios - the backdoor listing many believed would happen months ago because of entrepreneur Mr Watson's significant holding in the company or, less likely, Aquaria 21 injecting $3-4 million into a small- to medium-sized company in what Mr Wikeley described as a "licensing scenario."

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