Clean Seas Needs More Cash To Finance Its Fishff

By Frank Knight

As Clean Seas continues to increase the biomass of live fish to a mid term target of 5,000 tons there will be a continuing requirement for additional cash due to the sale lag time and the cost of carrying increasing volumes of inventory.

Clean Seas currently has 4,000 tons of biomass in the water and would expect to reach the 5,000 ton level by April 2009. The company is actively working to more evenly match growth with sales requirements. This will take some pressure off cash requirements

Farming operations have a lag time between the cost of growing the product and the cash flow from the sale of the product. Kingfish farming requires a 16 month initial growing season and the product is then sold over a 12 month period.

Clean Seas has committed facilities of $27.0 million in place with Rabobank Australia to facilitate this growth. The directors believe this facility will allow Clean Seas to fund the mid term inventory target of 5,000 tons.

The company continues to review its options for sourcing additional equity/debt prior to committing to any further expansionary plans. The directors expect reliance on the current bank facility to decline once higher levels of finfish sales occur in the March quarter of FY2009. However, Clean Seas anticipates, as previously advised to shareholders that a capital raising will occur following a successful Southern Bluefin Tuna spawning.

Clean Seas Tuna is one of the firms which are listed in the Atuna Stock Index – click here to go to the Stock Index