SeaDragon completes Snakk selldown
Nelson fish-oil refiner SeaDragon has completed the selldown of its stake in Snakk Media as it lines up a $6 million expansion plan.
The sale, which averaged a price of 10 cents a share, raised $2.5m for reinvestment.
NZX-listed SeaDragon inherited the 25 million Snakk Media shares when it joined the stock exchange by means of a reverse takeover of Claridge Capital in late 2012.
But it has slowly been selling down its stake since August last year.
Chief executive Ross Keeley said it had sold the shares as it believed the capital would be better deployed in investment opportunities within the Omega-3 fish-oil market.
"The proceeds from the sale of Snakk combined with our ongoing share purchase plan will be used for working capital support and to fund the construction of our new refined fish-oil plant in Nelson," Keeley said.
The company went into a trading halt in November as it started a capital-raising scheme to fund the new fish-oil refinery.
The $6m expansion plan would more than double its staff and establish a new factory in Richmond, Nelson.
SeaDragon was established nine years ago and processes the byproducts of the Nelson fishing industry, sourcing them mainly from Talley's but also from Sealord.
The new refinery, to be built on the outskirts of Richmond, 20 kilometres from Port Nelson, would have capacity to produce more than 5000 tonnes of refined fish oil, and could generate annual sales of up to $50m.
Already Australasia's largest refiner of internationally certified fish-derived and Omega-3 health- supplement oils, the company aims to lift processing from 400 tonnes to 500 tonnes a year to almost 5000 tonnes.
The share purchase plan closes today, the outcome of which is expected to be announced early next week.
FFX /hm rm