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King Salmon hoping to hook $77.5m in IPO

AAP logoAAP 23/09/2016 Paul McBeth

New Zealand King Salmon plans to sell shares at $1.12 in an initial public offering, giving one of its cornerstone shareholders an exit from the Marlborough Sounds fish-farmer and raising $30 million of new capital.

The Nelson-based company wants to raise up to $77.5m selling as many as 69.2 million shares in an IPO, listing on the NZX and ASX next month.

Of the funds raised, up to $45m would go to Direct Capital, letting the private equity firm exit its shareholding, and $2.5m to other shareholders including its other cornerstone investor, Malaysian-owned Oregon Group.

King Salmon plans to use $16.7m of the new capital raised to repay bank debt and shareholder loans and $8.2m to partially fund a new farm, while $5.1m will be gobbled up by offer costs.

The offer has attracted food investor China Resources Ng Fund, which bought a 15 per cent of apple exporter Scales Corp from Direct Capital in March, and the New Zealand Superannuation Fund.

The Chinese firm will take a 10 per cent stake and NZ Super will hold a 5.5 per cent share.

King Salmon is projecting revenue of $130.1m in the year ending June 30, 2017, for a profit of $10m, compared to a $2.6m profit on sales of $114.1m in 2016.

The company operates seven farms in Marlborough's Pelorus and Queen Charlotte Sounds and has three new farms coming on stream.

The consents for the new sites were opposed by environmental groups all the way to the Supreme Court in 2014, which succeeded in winning a protection of "outstanding landscapes" and ruling out another proposed farm.

The offer opens on Oct. 3 and closes on Oct. 14, with trading expected to start five days later.

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