The $1.5 billion venture in Australia’s far north to build one of the world’s biggest prawn farms has raised another $24 million from investors, including its partner in the project, Japanese seafood giant Nissui.The listed Seafarms Group yesterday mandated Bell Potter, led by its principal Hugh Robertson to raise $20m at 9c per share — a discount of about 15 per cent to the trading average price of recent weeks. Seafarms shares were trading at 10.5c before they were halted from trading.The company is also raising a further $4m via a share purchase plan, for which Nissui reserved its right to participate pro rata on its 15 per cent stake.
In addition to the raising, Seafarms executive chairman Ian Trahir is converting $3m of his loans to equity at the same price as the placement, and seeking shareholder approval to switch the balance of his $12.2m shareholder loan from the company to a convertible note with a one-year duration, convertible to ordinary equity at 10c per share.The issue, which was 75 per cent subscribed when Bell Potter took it to investors yesterday morning, valued Seafarms at $177m on a post-offer basis.
The Sydney-based Seafarms, which farms banana and black tiger shrimp at its farm in Queensland that can grow more than 1800 tonnes annually, is developing a major land-based prawn farm, Project Sea Dragon, at Legune station in the Northern Territory.When Project Sea Dragon is built and operating at full capacity — the first stage of 1200ha of prawn ponds are under construction — it will have 10,000ha of ponds built on the station’s coastal flood plains yielding 100,000-150,000 tonnes of tiger prawns annually, valued at $1.7bn.Construction is due to start on the project when the wet season ends, and production is expected from 2021. It is expected to generate at least 1500 jobs.
Last week the federal government renewed major project status for the Sea Dragon development.Nissui (Nippon Suisan Kaisha) paid $24.99m last May for a 15 per cent stake in Seafarms, and Bell Potter told clients that Seafarms had alluded to other global players conducting due diligence to participate in Project Seadragon.In February Seafarms reported a net loss of $13.2m in the last six months of 2018 but told investors it had made progress on a number of fronts, including the support of Nissui.
SFG Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
