"TROUBLED South Australian company Clean Seas Tuna has refused to rule out another capital raising, as it considers a radical restructure of its business following last week's shock $14 million loss. The company was unable to rule out job losses as a result of a "bottom up" review of the business, which it flagged at the release of its half-year results on February 26.
Clean Seas Tuna shares plummeted 59 per cent to a record low of 9c a week ago as investors dumped the stock on the unexpected loss, due largely to problems in the company's kingfish business, as well as news that Southern Bluefin Tuna fingerlings bred in the latest cycle had failed to survive past 38 days.
The deaths have raised concerns about the company's ability to commercialise its technology, which allows it to breed tuna in onshore tanks before farming them to a marketable size.
The surprise announcement also drew scrutiny from the Australian Securities Exchange, which queried the company on the timing of the bad news.
After Clean Seas Tuna managing director Clifford Ashby spent the past week meeting investors, chairman John Ellice-Flint discussed the result for the first time yesterday, telling The Australian he still believed in the company.
"We've been successful in three of the past four years at closing the life cycle," he said. "The technology is sound. The next step will be to get the tuna into the sea."
Mr Ellice-Flint, a former chief executive of gas producer Santos, said he was not too surprised by the sharemarket's savage reaction, since the company had failed to move the fingerlings into the sea as promised.
Having joined the board in December, he has led an extensive review of the formerly family-owned business, which had evolved into a publicly owned company. Founder Hagen Stehr remains a major shareholder and a director of the company. Mr Ellice-Flint and Mr Ashby declined to comment on funding options for the group, which had $17m in cash at the end of January despite raising $76m last year through share placements to institutions and share offers to existing investors.
"We're examining all options regarding the business," Mr Ashby said yesterday. It is understood the company is advised by Lazard, which assisted its most recent capital raising.
One of the options believed to be under consideration is a sale of the kingfish business, which has traditionally brought in the revenue needed to sustain the tuna development program. Mr Ashby defended the company's record of disclosure, saying it released details of the kingfish accounting loss as well as the fingerlings' deaths as soon as it had the details.
The company confirmed its compliance with the continuous disclosure obligations."
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