Eco Investor October 2014

Pre-Profit Securities

Another Prawn Farm on Commodity Group's Barby

Commodities Group has purchased the prawn farming business of Queensland aquaculture company Coral Sea Farms Australia Pty Ltd through its aquaculture subsidiary, Seafarms Group Ltd.

The acquisition will increase Commodity Group's annual production capacity by 25 per cent, and mean that Seafarms will represent over 30 per cent of Australian production. It will also expand its hatchery to supply the new operations and help expand its exports.

The Coral Sea Farms business includes 32 hectares of ponds and a processing facility at Hinchinbrook. Seafarms' managing director, Robert Bell, said the Coral Sea Farms business has been in operation since 2002, and is located just thirty minutes drive from Seafarms' operations at Cardwell, allowing for considerable consolidation and economies of scale.

The $4.2 million acquisition will be funded through cash and debt. $400,000 is payable on completion and $3.8 million in quarterly instalments over the next three years.

Commodities Group has placed the balance of the shortfall for its recent rights issue at 5 cents per share, raising $2.6 million. (ASX: COZ)





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