Sharechat Logo

King Salmon signals IPO that may raise about $30M to build more farms

Monday 29th August 2016

Text too small?

Marlborough Sounds fish-farmer New Zealand King Salmon is signalling an intention to sell down existing shares and raise new capital in an initial public offering that would see the three-decade-old company list on both the New Zealand and Australian stock exchanges.

More detail on the offer is expected this Wednesday, but chief executive Grant Rosewarne said the company is "expected to raise $30 million" in a float that would see long-term majority shareholder Oregon Group drop from its current 51 percent to a 40 percent shareholding, while Auckland-based investor Direct Capital had yet to decide how much of its 42 percent stake to sell down.

New capital raised would be used to help fund three new salmon farms in the Marlborough Sounds, which King Salmon won resource consents for last year after a marathon process that saw the company's name attached to a landmark Supreme Court interpretation of the Resource Management Act in relation to outstanding coastal landscapes.

"We have an excellent growth opportunity ahead of us," Rosewarne told BusinessDesk. "We require capex for the farms to go in and for working capital."

The transparency of being a publicly listed company would also improve the company's "licence to operate" and the share offer would give New Zealanders an opportunity to be part of the industry.

The company bills itself as the world’s largest aquaculture producer of the King salmon species and operates under three key brands: Ōra King, Regal and Southern Ocean.

Its new resource consents allow it to double production to around 6,000 metric tonnes annually to serve export markets including North America, Australia, Japan and other parts of Asia, and Europe.

Malaysian-owned Oregon Group, which has mainly forestry investments in New Zealand, first invested in New Zealand King Salmon 20 years ago.

Oregon's continuing involvement "reflects their ongoing support for New Zealand King Salmon and desire to remain invested in the company alongside new investors," said chairman John Ryder in a statement.

The company turned over $114.1 million to produce pro forma earnings before interest, tax, depreciation and amortisation of $16 million in the year to June 30, and is expected to declare fully imputed dividends of $5 million in the current financial year, rising to $5.6 million in 2017/18, with a target payout ratio of 50 percent of net profit after tax.

As part of its strategy, the company will be including a 'priority offer' element to eligible residents in the Marlborough and Nelson Bays regions, where the company's current eight, soon to be 11, salmon farms operate.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports