Ann: GENERAL: CVT: Comvita and SeaDragon Agreement

• Release Date: 28/09/15 09:22
• Summary: GENERAL: CVT: Comvita and SeaDragon Agreement
• Price Sensitive: No
• Download Document  7.49KB

					CVT
28/09/2015 09:22
GENERAL
PRICE SENSITIVE
REL: 0922 HRS Comvita Limited

GENERAL: CVT: Comvita and SeaDragon Agreement

Comvita secures future in high quality New Zealand sourced fish oils through
underwrite of SeaDragon capital raising.

Comvita (NZX:CVT) and SeaDragon (NZX:SEA) today announce they have reached
agreement to facilitate the successful completion of SeaDragon's capital
raising and give Comvita access to a supply of New Zealand-produced,
high-quality refined fish oils.

Comvita has agreed to participate in the shortfall bookbuild associated with
SeaDragon's three-for-five rights offer. Comvita's commitment, together with
acceptances received as at Friday 25 September 2015, means the issue has
exceeded the minimum target of $5.0 million.

This capital, combined with the $2.5 million already committed by SeaDragon's
21.8% shareholder BioScience Managers, will provide SeaDragon in excess of
$7.5 million. The short fall book build, undertaken on Tuesday 29 September,
will provide an opportunity to increase the capital raise towards the maximum
target of $9.09 million.

The capital raised will be sufficient to meet SeaDragon's investment
requirements for the immediate future including:

o The completion of its new Omega-3 refinery in Nelson;
o The addition of a fractionation plant to the new refinery;
o The upgrade of SeaDragon's existing manufacturing facility;
o The company's ongoing working capital requirements; and
o The costs associated with the rights offer.

SeaDragon and Comvita are committed to working with the wider New Zealand
fishing industry in the pursuit of maximising value from sustainably
harvested local seafood resources. Additionally, a Comvita representative
will join the SeaDragon board after the completion of the rights offer.

SeaDragon Chairman Colin Groves said: "This investment commitment from
Comvita is a big win for adding value to New Zealand's primary sector and a
significant endorsement of SeaDragon's strategy. It brings together two New
Zealand-owned companies with complementary expertise to develop the greatest
value from the country's precious primary resources.

"Comvita, with its extensive international distribution network and premium
brand image, particularly in fast-growing Asian markets, has the capability
to make the most of this opportunity.

"Comvita will become a significant domestic customer, while its standing in
New Zealand's export community and its contribution to the SeaDragon Board
will also assist SeaDragon to achieve its growth ambitions both here and
offshore. We are looking forward to working with the Comvita team."

Comvita Chairman Neil Craig said: "Comvita has long-believed New Zealand fish
oils can command a premium in international markets as the region is
synonymous with clean, deep, blue oceans and high quality primary sector
exports.

"Omega-3 fish oils have become a core ingredient platform for Comvita, but
until now we have not been able to consistently source local supply to
establish a unique New Zealand-sourced range. SeaDragon, as New Zealand's
largest refiner and blender producer of high quality fish oils, provides
Comvita with long-term security of supply."

Key agreement terms:
- Investment
SeaDragon is seeking to raise up to $9.09 million in new equity capital with
its rights offer and shortfall book build. The rights offer closed last
Friday 25 September 2015 and the shortfall bookbuild opens on Tuesday 29
September 2015.

Comvita has undertaken to subscribe to at least $2.0 million of shares
attributable to unexercised rights offered as part of the shortfall
bookbuild. The final amount will depend on the amount of rights exercised and
the extent of participation in the bookbuild by other investors.

SeaDragon will scale Comvita's final investment commitment in the shortfall
bookbuild to ensure it obtains sufficient shares through the rights offer
together with options attaching to the shares issued through the rights
offer, to obtain a 19.9% stake in SeaDragon.

- Option agreement
SeaDragon has agreed to grant to Comvita an option to subscribe to additional
ordinary shares at a price per share of $0.008 per share resulting in an
aggregate subscription price of $3 million. The option may only be exercised
in full and it must be exercised by Comvita before 1 October 2017.

The issuance of the option, in line with the Takeovers Code and NZX Listing
Rules, will be conditional on the approval of SeaDragon shareholders not
associated with Comvita. Additionally, SeaDragon may require Comvita to
exercise the option if certain milestones are achieved.

Those milestones include: an operating cash flow target; commissioning of
additional plant; confirmation of finished product quality and raw material
supply milestones. All of these milestones need to be achieved before
SeaDragon can require Comvita to exercise this option.

- Supply agreement:
Comvita and SeaDragon have also undertaken to negotiate and enter into a
supply agreement giving Comvita rights of first refusal to all SeaDragon
products. The price for supply has yet to be agreed but it is to be based on
a market rate to be established with reference to a range of benchmarks.

Ends

For further information:
Brett Hewlett, Comvita CEO, 021 740 160
Neil Craig, Comvita Chairman, 021 731 509
Kathy Gieck, Media, 021 547 194

SeaDragon
Colin Groves, SeaDragon Chairman, 021 928 003
Richard Inder, Merlin Consulting, 021 645 643

About Comvita:
Comvita (NZX:CVT) is a global natural health company committed to the
development of innovative products, backed by ongoing investment in
scientific research. We are the world leaders in Manuka (leptospermum) honey
and fresh picked Olive Leaf Extract, which are at the core of the Comvita
product range. We have approximately 50% of honey supply under direct
ownership or control, with the balance of supply from long term contractual
and partnership arrangements. Comvita pioneered the development and use of
medical grade Manuka honey and was the first to receive FDA approval (2007).
We partner with US wound care company Derma Sciences, Inc. (NASDAQ:DSCI), the
global licensee for Medihoney(R) specialist wound care products, which are
used in hospitals and medical centres around the world. Comvita's freshly
picked Olive Leaf Extract is grown, harvested, extracted and bottled at the
world's largest specialised olive leaf grove, with over one million olive
trees. Comvita sells into more than 18 countries through a network of our own
branded retail locations, online (seven country specific e-commerce websites)
and third-party outlets. We have over 500 staff located in New Zealand,
Australia, Hong Kong, Japan, Taiwan, South Korea, the United Kingdom and the
USA. For more information visit: www.comvita.co.nz

About SeaDragon:
SeaDragon (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. For more information visit: www.seadragon.co.nz
End CA:00270831 For:CVT    Type:GENERAL    Time:2015-09-28 09:22:33