Three companies seeking funds

Recapitalisation and fund raisings are under way for three separate listed Dunedin companies which are going to the market, or shareholders, seeking a total of at least $30 million.

Yesterday, Blis Technologies announced a news trifecta, having purchased the Dunedin-based Gourmet Ice Cream Company for an undisclosed sum; being granted approval to sell its oral probiotic Blis K12 product as a food ingredient in the United States, and that additional, but unspecified, funding will be required to keep the company solvent.

Separately, Pacific Edge, of Dunedin, had a double-header announcement, confirming it had concluded a $5.1 million private placement yesterday, and also announcing a three-shares-for-seven rights issue, valued at up to $16 million.

Pacific Edge yesterday said it was looking for funding of "at least" $10 million, with $4.5 million for a certified laboratory in the United States, $7.5 million for US staff recruitment and $8 million set aside for operational costs.

In late June, Scott Technology of Dunedin, with a market capitalisation above $40 million, announced a rights issue of up to $9.5 million, to pay off debt of around $8 million from earlier acquisitions, and possibly position itself for more purchases.

Blis chief executive, Barry Richardson, said because of the persistently high New Zealand dollar and lower than expected sales, Blis would "likely sustain an increased operating deficit in the current financial year."

"Additional funding will be required to cover the forecast operating deficit and ensure that an appropriate capital structure is maintained," he said.

Blis had obtained "GRAS (Generally Recognised As Safe) status", by the powerful Food and Drug Administration in the US, which requires all ingredients used in food manufacturing obtain a standard for safety.

"Until now the Company's BLIS K12 probiotic has only been able to be sold as a dietary supplement, but yesterday's announcement will dramatically expand market opportunities for the company and enable the BLIS K12 probiotic to be marketed and sold to all food manufacturers in the US," he said in a statement yesterday.

On the purchase of The Gourmet Ice Cream Company, Dr Richardson said it was a strategic investment for two reasons; to provide cash-flow and also provide the opportunity to get the probiotic BLIS K12 into frozen dairy products.

Pacific Edge chief executive David Darling said the company was building on the momentum gained from recently announced licensing agreements with Healthscope in Australia and Oryzon in Spain, for its diagnostic testing product Cxbladder.

Pacific Edge now plans to deliver Cxbladder in a laboratory in the US which comes under federal regulatory standards which apply to all clinical laboratory testing performed on humans in the US.

Scott, which operates with long-term manufacturing contracts in US denomination, has borne the brunt of the high New Zealand dollar in recent years, but that problem has been offset, to some extent, by niche-market company acquisitions.

Most of the $9.5 million sought would be used to pay the acquisition debt of Rocklabs, HTS-110 Ltd and company Malcolm Smith Reference Materials, which Scott have purchased during the two years.

- simon.hartley@odt.co.nz