http://www.seadragon.co.nz/assets/28...t%20Update.pdf
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Talk about a big sell, no wonder capital raising is not till Aug/Sept so there PR boffins could pen this.
“Tricks and treachery are the practice of fools that don't have brains enough to be honest.”
― Benjamin Franklin
The size of the disclaimer is a good indication as to quality of what follows.
Not sure how many times have we heard the supply issues are sorted but looking at the forecast they are somehow going to sell an extra $3.8m of product for a variable cost a $120k less than last year? No explanation as to how they are going from 8% to 44% margin?
Equally remarkable - they are basically doubling sales and will have 2/3rds the debtors, maintain creditor levels and reduce stock by $1.2m? Makes absolutely no sense at all.
Not that it all makes for an exciting result - $100k on $12.2m is more than $1m behind original forecasts.
And finally - not only do they need $5m out of shareholders they are looking for another $3m from banks.....
Total train wreck
SEA: NZX and Media Release 10 August 2015
SeaDragon announces terms of Rights Offer and Shortfall Bookbuild
Capital to fund Omega-3 refinery completion and meeting working capital requirements
New Zealand’s largest refiner and blender of fish oils SeaDragon Limited (NZX:SEA) today
announces a rights offer to raise a minimum of $5 million to assist with the company’s
transition to the commercial production of Omega-3 oils.
The offer includes a pro-rata offer to all Eligible Shareholders of renounceable rights
to buy shares and options to buy shares (the Rights Offer), together with a Shortfall
Bookbuild (the Shortfall Bookbuild). (The Rights Offer and the Shortfall Bookbuild are
referred to together as the Offer).
The Rights Offer is an offer to Eligible Shareholders of the right to acquire (i) one new
share and (ii) one option to acquire a new share. Eligible Shareholders will be granted 3
rights for every 5 existing shares held on the Record Date. Entitlements will be scaled
up to a minimum holding of 2,000 rights.
The rights will be issued at no charge and will trade under code SEARA on the NZX Main
Board. The price for exercising the rights will be $0.008 per right and new shares will
be issued on the same terms as the existing ordinary shares.
Any new shares and options attributable to rights not taken up by the closing date,
including those rights of persons who are not Eligible Shareholders, will be offered to
Eligible Bookbuild Investors via a Shortfall Bookbuild process.
The options issued as part of the Rights Offer will be exercisable at any time during the
period from 1 October 2015 until 5:00pm on 29 September 2018 for an exercise price of
$0.015 per new share. These options will not be listed for trading on the NZX Main Board.
SeaDragon Chairman Colin Groves said: “SeaDragon has a unique opportunity to capitalise
on the deep blue waters of New Zealand and the South Pacific to be the only large-scale
food grade Omega-3 fish oil producer in Australasia and South East Asia.
“The capital raised in this programme will be used to assist the realisation of this
opportunity, funding the completion of SeaDragon’s new Omega-3 plant in Nelson, the
addition of a fractionation plant to that facility (leading to a higher value, higher
quality product), to upgrading the existing Omega-2 facility, to paying the costs of this
offer and to meeting the company’s working capital requirements as it transitions to the
commercial production of Omega-3 fish oils.
“On successful completion of the offer, and completion of the Omega-3 plant, SeaDragon
will be in a strong position to grow the profitability of the business, aligned with our
vision to be recognised by consumers as the global leader in the production of unique and
sustainably harvested fish oils for use in supporting healthy lifestyles.”
Key dates:
Event Date
Record Date for determining entitlements under the rights offer (the Record Date) 5:00pm,
20 Aug 2015
Opening date for the offer 20 Aug 2015
Rights trading commences on the NZX under the ticker SEARA 18 Aug 2015
Rights trading closes on the NZX 7 Sept 2015
Closing date for applications 5:00pm, 11 Sept 2015
Book build process Open: 11 Sept 2015
Close: 15 Sept 2015
Issue and allotment of new shares 18 Sept 2015
Eligibility
The Rights Offer is only open to shareholders of SeaDragon with registered addresses in
New Zealand as at the Record Date, or other persons that SeaDragon is satisfied can
participate in the rights offer in compliance with all applicable laws (Eligible
Shareholders).
SeaDragon considers that the legal requirements of other jurisdictions in which
shareholders have a registered address (including Australia, the United States and the
United Kingdom) are such that it would be unduly onerous for SeaDragon to make the Rights
Offer in those jurisdictions.
The entitlements of all shareholders of Seadragon who are not Eligible Shareholders will
be issued to a nominee who will endeavour to sell those entitlements. The net proceeds
(if any) less costs (calculated as 0.25% of the price at which the rights are sold) will
be paid to those shareholders.
Shortfall Bookbuild
The Shortfall Bookbuild will be completed by 15 September 2015. Eligible Bookbuild
Investors participating in the Shortfall Bookbuild will be able to bid for new shares
that are attributable to Unexercised Rights.
If the proceeds from the issue of new shares under the Shortfall Bookbuild on a per share
basis (Bookbuild Price) exceeds the issue price ($0.008 per right), such excess less
transaction costs will be paid to the holders of the Unexercised Rights in proportion to
their holdings of Unexercised Rights.
Offer Document
Full details and terms of the offer will be contained in an Offer Document, which will be
made available to be downloaded from NZX Limited’s website, www.nzx.com, under stock code
SEA.
Application has been made to NZX for permission to quote the rights on the NZX Main
Board, and all the requirements of the NZX relating thereto that can be complied with on
or before the date of the offer will be duly complied with. However, NZX accepts no
responsibility for any statement in this announcement or the Offer Document to which it
relates. NZX is a registered exchange which operates the NZX Main Board, a registered
market, regulated under the Financial Markets Conduct Act 2013.
For further information contact:
Colin Groves
Chairman
Tel: +64 21 928 003
About SeaDragon: www.seadragon.co.nz
SeaDragon Limited (NZX:SEA) is New Zealand’s largest refiner and blender of high-quality,
internationally certified concentrated fish oils and fractions, including Omega-3 oils.
Our oils are sourced from fish caught in the clean and pure waters around New Zealand, in
the Southern Ocean, and elsewhere. We have more than 20 years’ experience processing fish
oils and we are recognised for the quality and purity of our products. We supply health
supplement manufacturers around the world to meet the burgeoning demand for pure,
high-quality fish oils, which are scientifically proven to deliver significant human
health benefits such as lowering the risk of heart disease, improving brain function and
joint health. The majority of our supply is exported.
Apathy will be here soon to fill everyone in on the correct course of action
:)
I'm not actually sure I can quite work it out... so subscribers can get 3 shares for every 5 they own plus the same number in options? Assume you only get options when subscribing.
That is a lot of shares.. think they will need 50% + uptake to hit the $5m target... good luck.
Will be interesting to see how the market reacts. 0.8c is a decent discount to current market and current market has already factored in the discounted placement. And provided there plans come off, the rights will also be in the money. My high level assessment is that if you are still holding, it is worthwhile taking part.
I sold out half recently at 2.2 and then pretty much the rest at a small loss (1.5c) as I saw this coming (should have dumped the full amount above 2c but didn't see it coming well enough. NOw hold just enough to make the placement worthwhile while not enough that I dont care if they fail.