Listed fish-oil company SeaDragon will use most of the $4.1 million from a capital raising to fund a new Omega-3 fish-oil refinery in Nelson.
SeaDragon said it had received strong investor response to its share purchase plan, which exceeded its $2.5m target when it closed on Friday.
The capital from the share purchase plan, along with $2m raised from a placement to eligible investors in November and $2.5m raised from the sale of SeaDragon's stake in Snakk Media, will also be used to retire debt and provide working capital, the company said.
SeaDragon said it has signed an agreement with Orange Building Group which will be the landlord of the Nelson refinery and a contract with Desmet Ballestra for the supply of fish-oil refining equipment. The plant is expected to open late this year.
"With key agreements for the refinery now completed we are looking forward to getting to work on the plant, which is the first step towards realising the significant opportunities we see in refining and distributing high-quality New Zealand-sourced Omega-3 fish oils," SeaDragon chief executive Ross Keeley said.
Orange Building Group will fund and construct the new building, leasing the premises to SeaDragon for an initial term of 10 years.
SeaDragon said it will outfit the new refinery for a total projected cost of about $4m, including the Desmet Ballestra equipment.
The new plant would be able to produce more than 5000 tonnes of refined fish oil and could generate annual salesworth up to $50m, SeaDragon said.
The plant will produce oil that is rich in Omega-3, primarily from hoki.
According to SeaDragon this will allow its customers to differentiate their products from anchovy-based oils which account for 83 per cent of world Omega-3 fish oil supply.
- Fairfax Media