Augusta seafood group Ocean Grown Abalone’s $5 million fund raising campaign is progressing under the stewardship of adviser View Street Partners, with the launch of its official offer document as the firm seeks to fund a significant expansion of its operations.
Ocean Grown Abalone managing director Brad Adams believes it is time for his private business to capitalise on around $11 million spent during the past decade to develop the undersea ranching technique it uses.
The technology involves specially designed concrete units, which are placed on the sea floor and seeded with juvenile abalone. Ocean Grown Abalone have not only designed the equipment but also claim experience in where these facilities will work.
Mr Adams said the ranched abalone advantage was sitting at a size between the smaller abalone raised in onshore aquaculture facilities and the big minimum size limit applied to wild-caught abalone.
View Street Partners co-founder Tim Andrew said there was significant interest in the fund raising which is limited to sophisticated investors and is likely to be followed by an IPO next year if the company achieves a series of milestones.
While this fund raising is capped at $5 million, chairman Ian Ricciardi and his associated entities may sell up to a third (15 million shares) of their existing 43 per cent (41 million shares) stake if any excess demand remains. The Ricciardis are a fishing family which built and operated an export food processing facility and currently hold a 50 per cent interest in Fremantle City Coldstores.
If fully subscribed, the raising represents slightly more than a 25 per cent increase in the company's equity base, valuing it at about $25 million.
Under the deal, View Street Partners will be issued with 7.3 million options at full subscription. The options will be issued at an issue price of 26 cents (a 30 per cent premium to the issue price of 20 cents) with an expiry date four years from the date of issue.