SeaDragon to raise $5 mln via discounted rights issue, placement to fund transition to Nelson factory

Thursday 2nd July 2015

SeaDragon, which announced an overhaul of its board this week, wants to raise at least $5 million through a discounted rights issue and a private placement to help fund the transition to its new Nelson manufacturing facility.

The Nelson based company intends to raise the funds through a pro-rata rights issue to existing shareholders and a potential private placement, it said in a statement. The terms of the offer haven't been finalised, but the board anticipates it would be 50 percent of the 1.6 cent closing price on June 30, implying a price of 0.8 cents per share, which may be underwritten. The shares rose 6.7 percent to 1.4 cents.

The new capital would be in addition to a $2.5 million convertible loan from cornerstone shareholder BioScience Managers, and is needed for the company's new Omega-3 fish oil refinery in Nelson, due to be commissioned later this year, which has gone over budget, stretching SeaDragon's balance sheet.

SeaDragon reported a $2.8 million loss for the year ended March 31, compared to a profit of $431,000 in 2014, following investment in new sales, marketing, and staff ahead of the refinery start-up. The company also said it had secured further squalene raw materials that should ensure squalene sales for the 2016 financial year are ahead of 2015.

BusinessDesk.co.nz

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