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Nelson fish oil manufacturer Sea Dragon almost doubled its targeted $2.5 million capital-raising from a shareholder share-purchase plan, accepting $4.1 million from the oversubscriptions.
The $4.1 million, combined with $2 million raised from a private placement last November and $2.5 million raised from selling its stake in Snakk Media, would be used to pay off debt, provide working capital and fund a new multimillion-dollar refined fish oil plant near Nelson, Sea Dragon chairman Dr Doug Wilson said in a statement yesterday.
''The new capital and the agreements ensure the company is in a strong financial position and remains on track for the completion of the refinery in the fourth quarter of this year.''
Shares in Sea Dragon were up slightly after the news, trading over 2c, having hit a year-high of 4.3c in mid-November.
Craigs Investment Partners broker Peter McIntyre said the $4.1 million raised would be a significant boost to the company's expansion plans and the news raised its market capitalisation to about $37 million.
However, he cautioned that with more than 1 billion shares in the market, management would have to focus on operations.
It would not be wanting to go back to shareholders in the near future, which could dilute the share value.
Private company Oak Building Group will fund construction of the new purpose-built refinery in Stoke, and lease it to Sea Dragon for 10 years, plus rights of renewal, while Sea Dragon has come to an agreement with oil engineering specialist Desmet Ballestra to fit out the building for about $4 million.
At Sea Dragon's existing Nayland Rd site in Richmond, also owned by Orange Building Group, it will continue to manufacture shark liver oil products.
Sea Dragon chief executive Ross Keeley said the new Stoke plant would have the capacity to produce more than 5000 tonnes of refined fish oil annually and could generate sales up to $50 million.
''The plant will produce oil high in Omega-3, primarily from hoki, sourced from the clean Southern Ocean fishery,'' Mr Keeley said. Anchovy-based oils represent 83% of world Omega-3 fish oil supply.
Sea Dragon said it had inherited 25 million Snakk shares when it joined the NZX, by means of a reverse takeover of Claridge Capital in late 2012, selling that stake last week for $2.5 million.
Makes: Australasia's largest refiner and blender of high-quality, internationally certified concentrated fish oils and fractions, including Omega-3 oils. Sea Dragon is the largest refined fish oil producer in Australasia, targeting 5000 tonnes annual production.
Sources: Oils sourced from fish caught in New Zealand waters, in the Southern Ocean and Pacific and Indian oceans. More than 20 years' experience processing fish.
For: Majority of oils exported, supplies health supplement manufacturers around the world. Source: Sea Dragon