SeaDragon [NZX: SEA], which manufactures fish oils for health supplements, raised two thirds more money than expected from a sale of shares to its investors, allowing it to pay down debt and fund a new refined fish oil plant.
SeaDragon raised $4.1 million from the share sale to existing investors, exceeding its $2.5 million target, the Auckland-based company said in a statement. The funds, combined with $2.5 million from the sale of a stake in Snakk Media and $2 million from a share placement, will be used for working capital, debt payment and funding the new plant, the company said.
"The SeaDragon board has resolved to accept all applications for the share purchase plan as it will allow SeaDragon to put in place a capital structure that will see us through our next phase of development," chairman Doug Wilson said.
SeaDragon is investing in a new factory to allow it to diversify from its current production of squalene and shark liver oil products and ramp up production of higher value Omega-3 fish oils from hoki, tuna and salmon, enabling it to grow its share of the US$30 billion market for fortified foods and drinks.
The company has an agreement with Orange Building Group, owner of its existing Nelson site, to fund and construct the purpose-built refinery in Stoke, which it expects to be completed in the fourth quarter of this year. SeaDragon expects to spend about $4 million fitting out the building.
SeaDragon expects to continue manufacturing its shark liver oil products on its current site and merge the two sites over the longer term, it said.
Shares in SeaDragon were sold to investors at a discounted price of 1.6 cents apiece. The stock gained 4.6 percent to an eight-week high of 2.3 cents.