The rights issue to shareholders is pretty solid at one new share for every 1.5 shares owned but the issue price of $4.25 a share is at a substantial discount to the level the shares have been trading at.
It is fully underwritten by First NZ Capital and will close on December 7.
The shares rose 13c to $5.83 after the announcement on Monday.
Seeka plans to strengthen its balance sheet to provide financial flexibility and freedom to pursue its growth as an orchard-to-market business covering a range of foods including kiwifruit, kiwiberries and avocado, chairman Fred Hutchings said.
Seeka is the biggest kiwifruit grower in New Zealand and Australia, the biggest nashi grower in Australia and is pushing into avocado growing, forming grower syndicates in Northland.
Its kiwifruit orchards covered about 1000ha and produced 10.4m trays of class 1 export fruit this season.
Its overall post-harvest handling of kiwifruit is expected to tally 31.2m trays this year, up from 25.6m last year.
The group has made significant land investments in Northland for kiwifruit and avocado-growing and is selling them as syndicate and management-supply agreements are completed.
Hutchings said Seeka also plans to introduce a new grower share scheme early next year. If approved by shareholders, the company will issue up to 2.6m shares to orchardists who supply all their kiwifruit, kiwiberry and avocado crops to Seeka.
The shares will be funded by an interest-free loan, held by a trustee, and qualify for dividends and voting rights for three years till fully vested in the shareholders. Dividends will be used to pay down the loans. An extension of the group’s employee share scheme is also planned.
Seeka confirmed its guidance of operating earnings (Ebitda) of $25m and net profit after-tax of between $6.5m and $7.2m for the December 2018 year. For 2019 it is targeting Ebitda of $27.5m to $28.5m, assuming expected increases in kiwifruit volumes, especially Gold fruit, and normal trading conditions across NZ and Australia.
