Source: The Advertiser
Clean Seas Tuna has unveiled a $54m capital raising to pay back almost $21m of debt and cope with reduced credit terms imposed by its feed provider.
Shares plunged almost 40 per cent to 30c within two hours of the company coming out of its trading halt, before finishing the day 38 per cent down at 33c.
As part of the board restructure, founder Hagan Stehr will step as chairman, managing director Marcus Stehr will become operations director, to be replaced by chief executive Clifford Ashby.
The company proposes three elements to the capital raising: 30 million shares to be placed by October 27, a further 138 million shares by December 8 (subject to shareholder approval), and the launch of a shareholder purchase plan to issue a further 48 million shares by November 24 in a bid to manage the dilution.
The 25c issue price offered a 52 per cent discount on the price at the trading halt, but only 24 per cent on last night's close.
The proposal also recommends sweeping changes to the board to overcome what it described as a ‘disappointing FY2009’, including a ‘mismatch of production and sales growth’.
The new-look board promises positive cash flow in the new year together with an expansion of sales and marketing throughout Asia.
Clean Seas paid $47.9 million to its suppliers last year but received only $27.1 million from its customers. The cash outflow was offset by a $24 million capital raising and $17.7 million in borrowings, which are currently being reviewed by the company.
Mr. Hagen Stehr said the proposed changes would give the company the strength to boost its Southern Blue Fin Tuna production. “On completion of the equity raising and with the addition of new, highly experienced board members, I firmly believe that Clean Seas will be a stronger and better company,†he said in a statement.
The company must also contend with reduced credit terms for its $1.6 million stock of fish feed. Its supplier has insisted on a reduction of terms from 180 to 60 days, requiring a $20 million repayment to rope in the costs.
Clean Seas wrote off $7.1 million in mulloway and kingfish stock and $5.8 in development costs in the second half of last financial year to "clear the decks'' for development.