Fish oil company SeaDragon says it will proceed with a new refinery southwest of Nelson after raising $2 million in new capital with the placement of shares to eligible investors.
``Worldwide demand for Omega-3 rich fish oil is growing rapidly supported by a compelling body of scientific literature on the human health benefits of Omega-3 rich diets,'' chairman Doug Wilson.
``SeaDragon's new refined fish oil plant will allow the company to take advantage of this opportunity and ensure we can meet demand well into the future.''
SeaDragon, the largest producer of refined fish oils in Australasia, exports about three quarters of its products. The company expects to complete its new factory on the outskirts of Richmond in the fourth quarter of 2014 and will likely move production of shark liver oil, squalene and krill oil from its Nelson site when the current lease expires.
The company's base in Nelson allows it access to Hoki fisheries as well as Salmon farmed in the Marlborough Sounds. Oil from both species are rare and can attract a premium over the anchovy oils that dominate the Omega-3 fish oil market, the company said.
SeaDragon said it also plans to offer shareholders the opportunity to buy as much as $15,000 of its shares at the same price as the share placement. The company today reiterated that it is unlikely to meet its earnings forecasts because of a delay in commissioning the new plant, which had previously been slated for completion in August 2014.
The company's shares have gained 33 percent this year, taking its market capitalisation to $53.3 million.
SeaDragon's 25.3 per cent shareholder BioScience Managers has committed to subscribe for shares sufficient to maintain its current proportional share in the company.
Following completion of a successful book-build last night, SeaDragon will issue 125 million new shares at 1.6 cents a share. Settlement is on Friday.
SeaDragon's board resolved to undertake a share purchase plan (SPP) offering all New Zealand resident SeaDragon shareholders who hold shares as at the nominated SPP record date, the opportunity to acquire up to $15,000 of shares at the same price as the share placement.
SeaDragon is expected to announce its six months result shortly.
- additional BusinessDesk