INDEPENDENT NEWS

SeaDragon's biggest shareholders to provide $1M loan

Published: Tue 15 May 2018 02:18 PM
SeaDragon's biggest shareholders to provide $1M bridging loan to meet cash-flow needs
By Jonathan Underhill
May 15 (BusinessDesk) - The biggest shareholders of SeaDragon have agreed to provide a short-term bridging loan of $1 million to allow the unprofitable fish oil refiner to continue to operate while it tries to negotiate longer-term funding.
Cornerstone shareholders – BioScience Managers, an Australian investment firm, and Pescado Holdings, which is associated with Christchurch's rich-lister Stewart family - agreed to the "short-term bridge facility" to ensure the company can meet its cash requirements through until June 30. The loan, which is to be repaid on June 15, is at an annual interest rate of 12 percent, to be paid monthly, and is secured by a second-ranking security interest over SeaDragon's assets behind an existing security interest held by Comvita.
SeaDragon narrowed its first-half loss to $2.7 million from a loss of $3.5 million a year earlier, while sales halved to $1.5 million, which the company said reflected its transition to Omega-3 fish oils from its "legacy" Omega-2 products. It had $2.29 million of cash on hand as at Sept. 30, it said in November when it drew down the remaining $1 million of a $3 million convertible loan facility with Comvita.
But it has continued to sail close to the wind. In May, the company said it would have an estimated cash shortfall of about $175,000 as of May 30. It forecast a normalised ebitda loss of $4.1 million to $4.4 million for the year ended March 31, down from a loss of $4.7 million a year earlier.
Today the company said it remains in talks with BioScience, Pescado and Comvita "with respect to medium- to longer-term funding" and continues to consider how other existing shareholders could participate in raising capital "including potentially through a follow-on renounceable pro-rata rights offer, which will further support the company’s longer-term capital requirements."
SeaDragon also said it will bring forward the timing of its annual meeting this year, probably to July, by which time it will have released its audited full-year results.
The shares last traded at 0.4 of a cent, valuing the 4.5 billion shares on issue at about $18.1 million, and have fallen 20 percent this year.
(BusinessDesk)
ends

Next in Business, Science, and Tech

General Practices Begin Issuing Clause 14 Notices In Relation To The NZNO Primary Practice Pay Equity Claim
By: Genpro
Global Screen Industry Unites For Streaming Platform Regulation And Intellectual Property Protections
By: SPADA
View as: DESKTOP | MOBILE © Scoop Media