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SeaDragon hooks new investor as Comvita exits

15th December 2020 By Bridget O'Connell | | @foodtickernz

An American family has taken a $726,000 stake in Nelson fish oil producer SeaDragon, buying out honey producer Comvita’s stake.

Seaspren Limited, the investment vehicle of the US-based Silverstein family, has bought “a little over” 10% of SeaDragon’s shares on issue, including Comvita’s interest.

SeaDragon said yesterday that Seaspren had acquired Comvita’s holding of 13.2 million shares in an off-market deal for 3 cents a share, which saw the honey company exit and pocket $396,023.

Seaspren was also issued with 11 million new shares at 3 cents each. It will get a seat on the board as part of the deal, which would be filled by either New Zealand resident Jake Silverstein, or his alternative substitute Richard Carey.

Silverstein said that they were “committed to continuing to invest deeply in New Zealand”, adding that SeaDragon was “particularly exciting because its unique, locally produced high quality Omega 3 products were central to so many major growth opportunities”.

SeaDragon chairman Bryan Mogridge said he was “confident that Seaspren’s knowledge and global connections will assist SeaDragon with its growth plans”.

The final sell down of Comvita’s stake came five years after it invested in SeaDragon. In September 2015, the Bay of Plenty honey firm took a 19.9% shareholding in line with plans to secure a supply of fish oil for a planned expansion of its range of health supplements.

Comvita said its exit was undertaken so the company could focus on its Mānuka honey and bee products.

Chief executive David Banfield said: “We made the decision to sell our remaining investment in SeaDragon in line with our Arotahi or Focus strategy.”

Seaspren’s investment came following a tumultuous period for SeaDragon, which last year secured a $4m cash injection from shareholders after years of losses.

The $4m support came via a convertible loan note from cornerstone shareholder, Pescado – largely owned by SeaDragon director Mark Stewart.

Pescado provided the company further backing, alongside senior management and directors, at another capital raise undertaken earlier this year, using crowdfunding platform Snowball Effect to raise cash from existing smaller shareholders.

At the time of the raise in September, Mogridge said that after a period of cost-cutting, which included delisting from the main market of the NZX, the board “strongly believe we are very close to that self-sustaining stage and would like to think that this current capital raise proves to be our last”.

“Our goal is laser focussed on making this company profitable so that the past five years of losses can be erased from our memories.”

However, he added: “We don’t expect SeaDragon’s turnaround to be an explosive rocket but rather a very steady performer proving that it can be a real company, attaining regular solid and growing profits upon which we can build a sustainable future, becoming a real business that is self-supporting and rewarding patient shareholders with regular dividends.”

Other major shareholders include specialist healthcare fund manager, Bioscience Managers, and SDMO Trustees which is the private investment vehicle of SeaDragon director Stuart Macintosh.



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