Fish oil firm eyes NZX listing

BILL MOORE

A low-profile Stoke fish oil refiner that has become the largest of its kind in Australasia is set to be listed on the New Zealand Stock Exchange and push ahead with expansion plans.

SeaDragon Marine Oils does not even have signwriting on its Nayland Rd factory. But it is producing hundreds of tonnes of refined hoki and shark oil for clients in the rapidly expanding dietary supplement industry.

Begun by Nelson seafood industry pioneer Angus McNeill in 1997 and sold to holding company Merinova in 2004, SeaDragon has eight staff.

It has now entered into a conditional heads of agreement with the listed investment company Claridge Capital.

In an unaudited interim 2011 report Claridge says it will acquire the business operations of Seadragon for $2.2 million and pay by issuing 600 million new ordinary fully paid shares to SeaDragon's existing owners.

It says if "certain financial performance milestones" are satisfied over the following two years, the purchase price will rise by a maximum of $1.83m, paid for with up to 500 million additional shares.

There are several conditions and the approval of Claridge shareholders is to be sought at a special meeting before the end of the month.

The report says SeaDragon is an expanding, innovative business that markets on a business to business basis and which has plans to significantly increase production of its specialist oils, including omega 3 and squalene, to meet increasing demand from North America, northern Asia and Europe.

SeaDragon chief executive Ross Keeley told the Nelson Mail that while Claridge was acquiring the company "they're also offering back to the current owners of SeaDragon what they call consideration shares, so the current owners of SeaDragon will continue to own the majority of the shares".

"It's a means by which SeaDragon will be listed on the New Zealand Stock Exchange. It's called a reverse listing, and it's highly likely that Claridge will change its name to SeaDragon."

Mr Keeley said the intention was to provide the company with the capital to grow.

"The curse of many SMEs (small and medium enterprises) in New Zealand is having access to capital to fuel growth. Growing companies have a massive appetite for cash."

He said the company already produced hundreds of tonnes of product a year, and was aiming to increase that to more than 1000 tonnes, mainly sourced from hoki caught by industry giants Sealord and Talley's. Its shark oil was derived from "ugly-looking" deepwater dogfish taken as bycatch of other fishing, often caught at depths greater than 500 metres.

If the purchase went ahead there was the option to expand the staff and the production range, with the potential to make products from salmon and tuna oil. "There's still one or two conditions to be worked through, but if it all comes to pass it will be most exciting," Mr Keeley said.

The company would source the majority of its oils from the New Zealand southwest Pacific fishery, "with the 100 per cent New Zealand image attached to it", and also aimed to increase sales into the New Zealand market, where currently almost all fish oil for human consumption was imported.

Auckland-based Claridge chairman Sean Joyce could not be contacted. The Claridge interim report shows a net loss of $228,000 for the six months to September 30, and records that a final payment of $250,000 from the sale of its interest in the former Nelson-owned New Zealand Nature Company was received on May 31.

Claridge shares traded at 1.4c on the New Zealand Stock exchange earlier this week. The share price briefly dipped to 0.5c during 2011, and peaked at 2c.

- ? Fairfax NZ News

Source: http://www.stuff.co.nz/business/industries/6235321/Fish-oil-firm-eyes-NZX-listing

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