SeaDragon raises $10 million

Fish oil refiner SeaDragon [NZX: SEA] has raised $10 million to help fund the completion of a new factory in Nelson.

It undertook an extra placement to investors in excess of what it was seeking through a rights issue and bookbuild.

The Nelson-based company sold 1.25 billion shares and options at 0.008c apiece, raising $10.01 million, which it will use to build its Omega-3 refinery and add a fractionation plant at the new site, upgrade its existing manufacturing facility, and provide it with enough working capital to keep operating.

SeaDragon raised $9.01 million in a rights issue and bookbuild, and another $1 million through a placement to investors whose demand exceeded what was available through the offer.

"In yesterday's shortfall bookbuild, the company received demand for shares well in excess of the amount provided by the rights offer and was facing the prospect of having to scale bids," chairman Colin Groves says.  

"After receiving expressions of interest from a number of qualifying wholesale investors, we decided to raise additional capital to give the company greater flexibility to pursue its growth plans."

SeaDragon got a boost earlier this week when health products maker Comvita said it would take a 19.9% stake in the company through the bookbuild, ensuring it would meet its minimum target of raising $5 million. \

The Te Puke-based company was also granted an option to buy $3 million of shares at 0.008c each in full before October 1, 2017, subject to shareholder approval, and will enter into a supply agreement with SeaDragon as it looks to expand its health supplement range.

Mr Groves says Comvita's participation assured the success of the capital raising and "also put in place a partnership that will maximise the value of New Zealand's sustainably harvested local seafood resources."

The new capital is in addition to a $2.5 million convertible loan from cornerstone shareholder BioScience Managers, which didn't participate in the offer.

Shares on issue will swell to about 3.13 billion from 1.88 billion. SeaDragon says a planned share consolidation has been delayed, and will be reconsidered at the close of the offer. The exercise price for the options is 1.5c.

SeaDragon shares last traded at 1.3c, valuing the company at $24.4 million.

(BusinessDesk)