Thursday 31st May 2018
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Oceania Natural will quit NZX's NXT market next month, pending shareholder approval, after two years on the bourse for minnows, saying the cost of staying listed is too much relative to its revenue.
The Auckland-based company was the third company to join the soon-to-be-defunct NXT market, listing in 2016 via a compliance listing at 64 cents apiece. The shares last traded at $1.42.
Oceania Natural focused on selling Manuka honey into China, which was initially profitable, but an oversupply through China's daigou 'grey' market led to evaporating margins. Oceania sought to diversify, by a product line of water sales, and while it sees long-term potential in that market it needs to refinance $1.2 million in August and its board say more investment is needed to achieve the desired revenue and profit targets.
The company's in talks with potential investors, with delisting a key component of their participation, which will probably be at a price "substantially lower" than the current trading price.
"In order to secure investors the board is very conscious to make an investment in ONL compelling," it said. "Delisting is intended to give comfort to prospective investors that capital they may introduce to ONL will be invested in the business for revenue growth and not spent on compliance costs."
A special meeting will be held late next month for shareholders to approve the delisting, with the official notice expected in about three weeks.
NZX granted Oceania Natural a waiver from setting new key operating metrics, provided it meets continuous disclosure requirements.
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