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Sealegs plans rights issue to fund cash flow

Thursday 20th November 2008

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Sealegs the maker of amphibious boats, said it will offer to sell new shares to existing investors, raising capital to fund its operations.

The decision to tap shareholders for more funds comes after the manufacturer last month cut its annual sales forecast citing a drop in demand for luxury goods.

The global economic slump has hit the market for top-end vessels, with so-called super-yachts in Monaco being offered for sale at knock-down prices as their owners see a slump in the value of other assets.

Sealegs gave no details of its placement and will make a further statement shortly, the company said today.

It expects sales will be in a range of NZ$11 million to NZ$15 million in the year ending March 31, down from a previous forecast of NZ$18 million. It is predicting a full-year operating loss for the year because of a "sudden and significant reduction in the rate of new orders," chief executive David McKee Wright said last month.

Shares of the company were unchanged at 14 cents and have tumbled 50% in the past month.

By Jonathan Underhill

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