Sealegs sinks rights issue

David McKee-Wright. Photo/ Glenn Jeffrey

Auckland boat maker Sealegs has told the stock exchange its plans for a rights issue have been put on hold.

Sealegs chief executive and director David McKee Wright said the board "considers current economic conditions will not support an expansive business plan and as such the company is basing its plans around operating cash flows and existing cash reserves."

Further to this the company would concentrate on "developing existing markets" and the planned capital raising had been postponed.

"International uncertainty makes raising money to execute an expansive business plan unwise at this time," he said.

Sealegs has developed a patented system of hydraulically motorised, steerable and retractable wheels for amphibious boats.

In October last year the company said it was feeling the effects of the deteriorating global economy and needed to raise more capital.

The company said it has experienced a sudden and significant reduction in the rate of new orders.

It expected demand for luxury goods like its boats to be weaker because of the global economic situation and is responding by expanding its marketing network.

Sealegs shares are currently changing hands on the New Zealand Stock Exchange for 5 cents each. They traded for more than $1 in early 2007, but its top price over the past 12 months was 65 cents, in April last year.

-HERALD ONLINE