Chemeq asks for less
By Vanda Carson
August 30, 2004
CHEMEQ executive chairman Graham Melrose's pay packet was 50per cent fatter last financial year despite the Perth-based biotech's struggle to achieve sales and maintain cash reserves.
Dr Melrose has been forced to use most of this money, plus more of his personal funds, to support the troubled company's capital raising, which was slashed following a poor market response.
The company, which listed five years ago, promises to revolutionise the pig and poultry industries with a new anti-bacterial agent that reduces mortality rates.
On Friday the company confirmed it hoped to raise just $30million, just over half the $55 million it had initially sought when it halted trading on its shares two weeks ago.
The $30 million raising is made up of a $10 million placement to professional investors at $2.40 per share and a $20 million fully underwritten non-renounceable rights issue offering one new share for every 11 shares held.
Dr Melrose, 70, who founded the company and owns more than 25per cent, has committed $6.5 million to the capital raising.
A prospectus for the rights issue lodged on Friday night showed Dr Melrose took home $614,796, including more than $50,000 in superannuation in 2003-04 - up on the $409,284 he received in 2002-03.
It also revealed Chemeq had already used its $5 million BankWest overdraft.
The urgent bank facility came as questions emerged in The Australian over the company's solvency as it raised $10 million at $4.55 a share in early June, when it appeared to be in deficit for over $2 million.
Recent documents released by Chemeq indicate its liabilities exceeded its assets as at June 30, necessitating the capital raising - with shares sold at $2.40.
The cash deficit forced the company to re-evaluate extensions to its hi-tech factory in the southern Perth suburb of Rockingham.
http://www.theaustralian.news.com.au/common/story_page/0,5744,10613212%255E462,00.html
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