SeaDragon moves on capitalraising
AUCKLAND: SeaDragon is calling on its shareholders to pay a 10% premium to participate in a $14.9 million prorata renounceable offer to help the struggling fish oil manufacturer remain afloat.
The company forecast a net loss of between $3.6 million and $4.6 million in the year ending March 31, 2019, and said its ability to deliver on forecasts depended on securing longterm funding.
‘‘As previously announced to shareholders in May 2018, the company has been considering capitalraising options and has decided to initiate a rights offer to share holders to provide additional capital to facilitate growth and meet working capital, operational expenditure needs and capital expenditure items,’’ SeaDragon chairman Colin Groves said.
The offer will be a 1for1 with an issue price of 3.3c per share, the same price as the conversion price under the convertible loan note agreements with cornerstone investors Pescado Holdings Ltd and One Funds Management Ltd. The shares last traded at 0.3c, valuing the company at $13.5 million, and have halved this year.
SeaDragon had already made a deal under which BioScience Managers and Pescado Holdings each agreed to advance up to $3 million via a convertible loan note facility. An existing such facility and option to purchase $3 million of ordinary shares in SeaDragon with Comvita will be amended.
The rights offer document will be released on August 28 and shareholders will be able to subscribe for one new share for every share they hold as of 5pm on the August 29 record date. Eligible shareholders who subscribe for their full entitlement of new shares under the offer may also apply for additional shares through an oversubscription facility. — BusinessDesk