Capital to fund organic growth

Certified Organics plans to raise $2.5 million in capital by 2006 to fund expansion.

Speaking at the company's annual meeting in Auckland yesterday, chairman Earl Stevens said the additional capital would be raised through a private placement of 8.85 million shares and options with Auckland investment and broking company Ellis Capital at 10c a share, and a one-for-seven rights issue at 7.5c a share, with attached options.

The company, which develops and commercialises organic pest control and plant health products, said the placement and rights issue would raise $1.5 million before expenses. Another $1 million before expenses would be raised through the options.

The rights and options, which will be partially underwritten, will require shareholder and regulatory approvals.

Managing director David Warrick told the meeting that sales for the six months to the end of this month were expected to exceed $400,000, an 80 per cent increase on the same period last year.

Last month the company announced it had won a $250,000 initial order for organic herbicide from the state Government of South Australia, which is testing its effectiveness against the weed broomrape.

"The success of that trial will be known by year end and we have every expectation that it will result in a major long-term supply contract," Warrick said yesterday.

Dr Stevens will stand down as chairman within the next three months to focus on other biological business interests, but will remain a director. He will be replaced as chairman by Wayne Cartwright, professor of strategic management in Auckland University's department of international business.

- NZPA