Coogee Chemicals chairman Gordon Martin has backed a recapitalisation of Fremantle-based Frankland River Olive Company Ltd, which is aiming to raise a total of $5.9 million through a placement and rights issue.
Coogee Chemicals chairman Gordon Martin has backed a recapitalisation of Fremantle-based Frankland River Olive Company Ltd, which is aiming to raise a total of $5.9 million through a placement and rights issue.
Mr Martin's Chemco Pty Ltd may emerge with a shareholding in excess of 25 per cent of the olive oil producer.
The full text of a company announcement is pasted below
The company wishes to announce the completion of a placement of 4,550,142 ordinary shares at $0.10 per share and a non-renounceable pro-rata fully underwritten rights issue of one ordinary share for every one share held to a total of 54,051,086 shares at $0.10 per share. Between the placement and the rights issue a total of $5.86m will be raised.
Patersons Securities Limited acted as Lead Manager to the placement and Lead Manager and Underwriter to the Rights Issue. The placement was issued to the Company's major shareholder, Chemco Pty Ltd. Following the placement and in anticipation of a shortfall from the rights issue, the company's major shareholder, Chemco Pty Ltd, may emerge with a shareholding of in excess of 25%.
The record date for entitlement to the rights issue will be 5th November 2007 and the Company will issue the Offer Documents to shareholders on the 6th November 2007. The closing date of the issue is 20th November 2007.
We have undertaken to recapitalise our balance sheet to ensure we have the working capital necessary take our operations though to future financial years, where we forecast our operations to become cash positive and profitable.
The funds raised will be used to;
- retire short term debt,
- fund capital expenditure,
- further increase marketing and brand development, and
- provide working capital.
The immediate future of the Company is expected to be a period of increasing packaged sales on the strength of the Jingilli brand, which this year was rated as one of Australia's best extra virgin olive oils.
The Company has begun a major prune of its Parmelia Grove which will affect approximately 20% of the total tree numbers. This will reduce the expected yield for the 2008 harvest, however is expected to result in a significant increase in the 2009 & 2010 harvests. This decision was made to reduce the size of the Barnea trees so as to increase the fruit recovery efficiency during harvest and promote new fruiting wood within each tree. This prune is viewed by the Company as an investment in the future productivity of the trees. Tree growth seen in the remaining varieties is encouraging with excellent extension growth being evident which provides promise for future yields.
The growing demand for Extra Virgin Olive Oil, particularly in Australia, United Kingdom, United States and China, coupled with increasing pressures on production from traditional European producing areas continues our belief that we establishing a long term profitable business.
