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Stewart family's SeaDragon stake increases

NZ Newswire logoNZ Newswire 11/10/2016 Paul McBeth

Christchurch's rich-lister Stewart family has built up a substantial stake in SeaDragon, exercising more than half the rights issued to prop up the fish oil manufacturer.

Pescado Holdings, a subsidiary of the family's Masthead Holdings, exercised 652 million rights for a total price of $5.2 million, representing 59 per cent of the securities, SeaDragon said in a statement.

The company said it has raised $8.8m with about 70 per cent of the rights exercised.

Seadragon wants to raise up to $12.5m at 0.8 cents a share to put the company on a more secure financial footing, and will offer the unexercised rights to eligible investors in a shortfall bookbuild, which will close on Oct. 13.

The company's latest accounts were tagged by the auditor over SeaDragon's ability to continue as a going concern and lender Heartland Bank temporarily suspending lending covenants to enable the capital raising. The shares last traded at 1 cent apiece.

The entry of the Stewart family as a substantial investor comes after the company warned on Sept. 28 that preliminary talks with a potential new cornerstone investor collapsed, although it was still negotiating with other possible shareholders.

Honey products manufacturer and distributor Comvita already owns 411 million shares of SeaDragon, and holds convertible securities that could lift its ownership to as much as 36.5 per cent.

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