German biotechnology pioneer has taken a 5% stake in troubled Dunedin company Botry Zen.
Claus Hartge, the managing director of Hamburg company Hartge Ingredients, is the second new cornerstone investor announced this week, and yesterday announced he would buy 10.372 million ordinary shares at 2c a share for a total investment of $207,000.
Earlier this week Botry Zen chairman Max Shepherd announced Mosgiel company Melic Innovators had agreed to a $500,000 loan along with a share subscription for 25 million ordinary shares at 2c, representing 12% of Botry Zen's capital.
The company has also secured a $1.2 million overdraft facility with the Bank of New Zealand in a rescue package needed to address a shortage of working capital.
Dr Max Shepherd said Mr Hartge has widespread commercial interests in international trade and agricultural industries in Europe and South America.
He was familiar with Botry Zen's botrytis cinerea fungus-fighting products Botry-Zen and Armour-Zen, Dr Shepherd said.
The company has targeted access to Europe's viticulture industry as key to growing the business and ABN Amro Craigs adviser Peter McIntyre said this alliance would assist that.
A waiver would be required from the New Zealand Stock Exchange for the deal, but Mr McIntyre said the deal diluted further existing shareholders' stakes.
Mr McIntyre said in the last few weeks the number of shares in the company has increased from 172 million to 207 million, but given the international liquidity crisis, he said Botry Zen had few options.
Mr Hartge's investment was seen as strategically a good move.
"To me, it seems to be a strategic investment for Botry Zen, because they have got a high profile businessman in Europe on board who has a significant stake.
"It will help them . . . in Europe, where most of their product will be sold."
Production difficulties at its Dunedin factory meant Botry Zen needed a capital injection, something shareholders last month rejected.
Earlier this week Dr Shepherd said production problems had eased but he could not say if those issues had been finally addressed.
