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King Salmon signals IPO to raise $30m

NZN 28/08/2016 Pattrick Smellie

Marlborough Sounds fish-farmer New Zealand King Salmon is signalling an intention to sell down existing shares and raise new capital in an initial public offering that would see the three-decade-old company list on both the New Zealand and Australian stock exchanges.

More detail on the offer is expected this Wednesday, but chief executive Grant Rosewarne says the company is "expected to raise $30 million" in a float that would see long-term majority shareholder Oregon Group drop from its current 51 per cent to a 40 per cent shareholding, while Auckland-based investor Direct Capital had yet to decide how much of its 42 per cent stake to sell down.

New capital raised would be used to help fund three new salmon farms in the Marlborough Sounds, which King Salmon won resource consents for last year.

"We have an excellent growth opportunity ahead of us," Mr Rosewarne told BusinessDesk. "We require capex for the farms to go in and for working capital."

The transparency of being a publicly listed company would also improve the company's "licence to operate" and the share offer would give New Zealanders an opportunity to be part of the industry.

The company bills itself as the world's largest aquaculture producer of the King salmon species and operates under three key brands: Ora King, Regal and Southern Ocean.

Malaysian-owned Oregon Group, which has mainly forestry investments in New Zealand, first invested in New Zealand King Salmon 20 years ago.

Oregon's continuing involvement "reflects their ongoing support for New Zealand King Salmon and desire to remain invested in the company alongside new investors," said chairman John Ryder in a statement.

As part of its strategy, the company will be including a 'priority offer' element to eligible residents in the Marlborough and Nelson Bays regions, where the company's salmon farms operate.

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