New refinery to bring jobs to region
Nelson fish oil refiner SeaDragon will go ahead with its new fish oil refinery after it raised $2 million in a bookbuild completed yesterday.
On Monday the listed company went into a trading halt as it looked to raise money for its $6 million expansion plan that would more than double its staff and establish a new factory in Richmond, Nelson.
The new refinery will be built 20 kilometres from Port Nelson and would have capacity to produce in excess of 5000 tonnes of refined fish oil, which would generate annual sales up to $50m.
Earlier this month SeaDragon said it had sold another tranche of its stake in Snakk Media, releasing a further $585,000 to invest in its new Nelson refinery.
SeaDragon's sale of 6.5 million shares in Snakk at 9 cents a share followed the August sale of 10 million shares in Snakk at the same price, the company said on November 1.
Chairman Doug Wilson said today's $2m share placement raising, combined with $1.8m gained from the sale of its Snakk Media shares, had given the company the resources to proceed with the construction of the new plant.
"The success of this share placement opens an exciting new chapter in SeaDragon's development."
He said demand for Omega-3 fish oil was growing rapidly worldwide, and the new plant would give the company the opportunity to ensure it could match this demand.
The company, established nine years ago, processes the byproducts of the Nelson fishing industry, sourcing them mainly from Talley's but also from Sealord.
Chief executive Ross Keeley said the company's base in Nelson gave it an advantage in the international market for Omega-3 fish oils.
Oil from nearby hoki stocks as well as salmon in the Marlborough Sounds was rare and attracted a premium over the standard anchovy oils which dominated the market.
The company aimed to lift from processing 400 tonnes to 500 tonnes a year to about 5000 tonnes.
It was already Australasia's largest refiner of internationally certified fish-derived and Omega-3 health-supplement oils.
SeaDragon will issue 125,000,000 new shares at 1.6 cents a share following the completion the bookbuild.
The company also announced it would undertake a Share Purchase Plan which would allow all New Zealand resident shareholders the opportunity to acquire $15,000 at the same price as the share placement.
It said further details would be announced shortly.
SeaDragon would release its half-result for the six months to September 30 on or before 28 November.