Christchurch's rich-lister Stewart family has built up a substantial stake in SeaDragon, exercising more than half the rights issued to prop up the fish oil manufacturer.

Pescado Holdings, a subsidiary of the family's Masthead Holdings, exercised 652 million rights for a total price of $5.2 million, representing 59 per cent of the securities, SeaDragon said in a statement. The company said it has raised $8.8m with about 70 per cent of the rights exercised.

Seadragon wants to raise up to $12.5m at 0.8 cents a share to put the company on a more secure financial footing, and will offer the unexercised rights to eligible investors in a shortfall bookbuild, which will close on October 13.

The company's latest accounts were tagged by the auditor over SeaDragon's ability to continue as a going concern and lender Heartland Bank temporarily suspending lending covenants to enable the capital raising. The shares last traded at 1 cent apiece.


"We are delighted with the level of support we have received and we are looking forward to engaging with our new substantial shareholder over its investment in the company," chairman Colin Groves said.

The entry of the Stewart family as a substantial investor comes after the company warned on September 28 that preliminary talks with a potential new cornerstone investor collapsed, although it was still negotiating with other possible shareholders.

Honey products manufacturer and distributor Comvita already owns 411 million shares of SeaDragon, and holds convertible securities that could lift its ownership to as much as 36.5 percent.

The Stewart family's last foray with a listed company saw it take a cornerstone stake in private hospital operator Acurity Health Group, before de-listing it with the company's other principal shareholders and ultimately selling to Australia's Evolution Healthcare.