CSS - Clean Seas Seafood

[Basilica]

Re: CSS - Clean Seas Tuna

Apparently only 250 fingerlings.

"About 250 fingerlings have been kept from this year's trial breeding program. "
- http://www.news.com.au/adelaidenow/story/0,22606,25442760-5003680,00.html
(BTW: I'm a long term CSS investor)

This should have been released to all investers at the same time. On ASX and not to just some investers who read Adelaide newspapers and had the chance to sell before trading halt.
Just in case anyone forgot. I was the one who said "If they even get a hundred in the cage they will have done well.
Death by Tank Collision .... that is a new one for me. Can the fingerlings swim that fast?

 

[tge oracle]

Re: CSS - Clean Seas Tuna

This should have been released to all investers at the same time. On ASX and not to just some investers who read Adelaide newspapers and had the chance to sell before trading halt.
Just in case anyone forgot. I was the one who said "If they even get a hundred in the cage they will have done well.
Death by Tank Collision .... that is a new one for me. Can the fingerlings swim that fast?

I suggest we wait for the announcement before jumping to our own conclusions . They should release all of the relevant information, presently being speculated about , with the Cap raising advice.

Notwithstanding the above, I do beleive a Cap rasining is the right decision at this time and I don't support increasing debt. They have credibility issues to resolve and there is no way the market is going to mark them any higher until they can deliver. They only have themselves to blame for this, their lax corporate disclosures have undermined confidence for the time being. The good news is that , I believe, market confidence will return as they deliver on their goals and CSS will be re-rated accordingly.

I wll comment further after the announcement.

 

[Basilica]

Re: CSS - Clean Seas Tuna

I suggest we wait for the announcement before jumping to our own conclusions .

I do not think i am jumping to any conclusions. The Number of 250 survivors was printed in an Adelaide newspaper where Hagen gave an interview. Although the 250 is not a surprise to me, the people who read Hagens previous interviews or this forum may have been expecting millions of fingerlings to survive. The quantity of survivors is market sensitive, and some people knew the number before the trading halt.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

I do not think i am jumping to any conclusions. The Number of 250 survivors was printed in an Adelaide newspaper where Hagen gave an interview. Although the 250 is not a surprise to me, the people who read Hagens previous interviews or this forum may have been expecting millions of fingerlings to survive. The quantity of survivors is market sensitive, and some people knew the number before the trading halt.

Yes, you have a valid point Basilica. If this does ,indeed, prove to be correct it would be unacceptable to release this information to newspapers prior to informing investors. Let's wait and see how many fingerlings they did produce.

On another issue, one of the comments I was going to make after the Cap raising details was about Managemnt of CSS. I have been considering how CSS will be effectively and productively mangaed in to the future and believe that a dedicated Manager, with experience, should be appointed.
Hey presto! in this mornings aquaculture news....new CEO appointed.
Refer link :

http://www.growfish.com.au/content.asp?ContentId=13342

 

[kenny]

Re: CSS - Clean Seas Tuna

Thanks for the link, tge oracle.

A quick Google to find some information on him led to these links if anyone is interested;

http://outernode.pir.sa.gov.au/foodSA/talking_food/food_talk_magazine/autumn_2005/face_of_food_-_capturing_the_corporate_life_in_rural_sa


http://www.abc.net.au/news/stories/2008/04/14/2216778.htm

Can someone tell me if 50 million fertilised eggs to 30 million larvae to 250 fingerlings is an expected survival rate?

Cheers,

Kenny

 

[truevalue]

Re: CSS - Clean Seas Tuna

Can someone tell me if 50 million fertilised eggs to 30 million larvae to 250 fingerlings is an expected survival rate?

Cheers,

Kenny

No. 1% would be considered to be a failure. 5% would be good.

The reason for the high mortality rate was firstly because they could not house 50m eggs and unfortuately a large portion had to be discarded. Secondly they were unprepaired for such large numbers and did not have enough feed and so lost alot of fish to canibalism. Thirdly the tanks they had turned out to be too small and a large number if fish died bashing themselves to death on the sides. They are investing in new larger tanks that will ensure a far higher survival rate in the future.

 

[Basilica]

Re: CSS - Clean Seas Tuna

On another issue, one of the comments I was going to make after the Cap raising details was about Managemnt of CSS. I have been considering how CSS will be effectively and productively mangaed in to the future and believe that a dedicated Manager, with experience, should be appointed.
Hey presto! in this mornings aquaculture news....new CEO appointed.

Interesting Oracle, Do you think he will be working full time or mostly for board meetings?

Can someone tell me if 50 million fertilised eggs to 30 million larvae to 250 fingerlings is an expected survival rate?

There is no expected survival rate for SBT as this is new territory.
Many species have a low survival rate of fertalised eggs. The percentage is not critical as tending for huge numbers is low cost. The important factor is can you produce enough for your needs. In this case 250 is not enough for CSS to profit on, but it is enough to gain experience in the next stage of the life cycle.

No. 1% would be considered to be a failure. 5% would be good.

The reason for the high mortality rate was firstly because they could not house 50m eggs and unfortuately a large portion had to be discarded. Secondly they were unprepaired for such large numbers and did not have enough feed and so lost alot of fish to canibalism. Thirdly the tanks they had turned out to be too small and a large number if fish died bashing themselves to death on the sides. They are investing in new larger tanks that will ensure a far higher survival rate in the future.

I think 1% of 50M would be considered successfull as 500K is a commercial qty. I agree with most of your reasons why survival is low and they are not impassible, and in future i would expect many times more surviving.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Interesting Oracle, Do you think he will be working full time or mostly for board meetings?



No, as a CEO he has been specifically employed to run CSS full time
Marcus will assume a role more like the one you specifiy above.
I think CSS has reached a scale and maturity that requires the knowledge and experience of a dedicated Manager who can supervise and direct the next phase of CSS's growth.
Apart from the SBT commercial propogation later this year there is also the refining of the YTK busness to achieve better margins and marketing penetration.

 

[truevalue]

Re: CSS - Clean Seas Tuna

The CSS announcement has been delayed until tomorrow.

I doubt there is anything sinister in this, rather that there was probably more demand for the institutional placement then they expected.

Hopefully they will limit the placement size somewhat to keep the institutions hungry for stock and also to prevent us poor, loyal, retail shareholders from being diluted too much.

I am thinking a $20-$25m raising now.

 

[FI$H]

Re: CSS - Clean Seas Tuna

The CSS announcement has been delayed until tomorrow.

I doubt there is anything sinister in this, rather that there was probably more demand for the institutional placement then they expected.

Hopefully they will limit the placement size somewhat to keep the institutions hungry for stock and also to prevent us poor, loyal, retail shareholders from being diluted too much.

I am thinking a $20-$25m raising now.

I wish I had sold this one when it was over a dollar.

it seems to me that small investors are the last to be informed about relevant developments and cap raising will go at our expense again...

does anyone know why bid prices of stocks change on ASX after trading hours? Right now it says bid 86c. what does that mean?

 

[tge oracle]

Re: CSS - Clean Seas Tuna

I wish I had sold this one when it was over a dollar.

it seems to me that small investors are the last to be informed about relevant developments and cap raising will go at our expense again...

does anyone know why bid prices of stocks change on ASX after trading hours? Right now it says bid 86c. what does that mean?

Brokers and traders playing " silly buggers " Fi$h. Don't worry about it , it happens all the time. What really matters is does CSS have a viable long term growth profile. I believe it does and trust that this will be confirmed by tomorrow's announcement.
CSS has the capacity to be a very long term consistant growth stock and a lot will hinge on their plan for the furure.

I will make futher comment after disgesting, metaphorically speaking , the finer details .

 

[FI$H]

Re: CSS - Clean Seas Tuna

but can growth keep pace with the dilution?

would any institution that is participating in the cap raising be able to obtain a similar stake in the company on the free market for a price that is even close to what they can get it for now? how much is the new CEO going to make for sharing inside information with institutional investors and local newspapers?
my advice for people that are interested in CSS is not to buy on good news if it is not coupled with suspiciously high activity the days and weeks before. Reading the AAQ thread helps the gauge management integrity in the aquaculture sector.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

but can growth keep pace with the dilution?

would any institution that is participating in the cap raising be able to obtain a similar stake in the company on the free market for a price that is even close to what they can get it for now? how much is the new CEO going to make for sharing inside information with institutional investors and local newspapers?
my advice for people that are interested in CSS is not to buy on good news if it is not coupled with suspiciously high activity the days and weeks before. Reading the AAQ thread helps the gauge management integrity in the aquaculture sector.

I will breifly add my replies to your qusestions:

1. Dilution - Yes,provided growth is viable and exponential.
2. Insto's buying on market - Possibly, but this will depend on volume. CSS is a low volume stock and most would wait for a Cap raising or XT with another insto.
3. CEO - He is , hopefully, going to stamp out this activity. Somebody needs to bring disciplne to this company.
4. Disclosure ( AAQ etc ) - Totally agree. CSS are a victim of their own poor dsiclosure and corporate integrity. This has to stop. They have an opportunity to create one of Australia's leading companies here and need the right personnel to achieve this objective.
5. Aquaculture integrity - Most small start ups suffer this problem, not just aquaculture. I would exclude TGR from this list however. Their managemnt profile is an example of what the rest should be doing.

The disclosure today must include all the facts , be open, and transparent.

We'll soon see!

 

[Basilica]

Re: CSS - Clean Seas Tuna

I wish I had sold this one when it was over a dollar.

it seems to me that small investors are the last to be informed about relevant developments and cap raising will go at our expense again...

does anyone know why bid prices of stocks change on ASX after trading hours? Right now it says bid 86c. what does that mean?

but can growth keep pace with the dilution?

would any institution that is participating in the cap raising be able to obtain a similar stake in the company on the free market for a price that is even close to what they can get it for now? how much is the new CEO going to make for sharing inside information with institutional investors and local newspapers?
my advice for people that are interested in CSS is not to buy on good news if it is not coupled with suspiciously high activity the days and weeks before. Reading the AAQ thread helps the gauge management integrity in the aquaculture sector.

Hi Fish,
You have summed up very well why i am still sitting on the side line and not yet an investor. (despite being very interested in the project)
An additional factor for me are the "Related Party Transactions".
I have not calculated it yet but it seem to me that more funds have flowed out of CSS to Hagen ,Then Hagen put into CSS to buy the 50% + ownership.
And Yes Oracle i do realise that goods and services were exchanged for that money, but i do not know the value of those goods and services, investors were not told the full details. Cages have a limited life span and how old they were was a secret.
And Fish i do agree with Oracle not to worry about silly bid and offer prices, That usually happens when stock can not trade and will be remove before opening.

 

[truevalue]

Re: CSS - Clean Seas Tuna

I wish I had sold this one when it was over a dollar.

it seems to me that small investors are the last to be informed about relevant developments and cap raising will go at our expense again...

does anyone know why bid prices of stocks change on ASX after trading hours? Right now it says bid 86c. what does that mean?

but can growth keep pace with the dilution?

would any institution that is participating in the cap raising be able to obtain a similar stake in the company on the free market for a price that is even close to what they can get it for now? how much is the new CEO going to make for sharing inside information with institutional investors and local newspapers?
my advice for people that are interested in CSS is not to buy on good news if it is not coupled with suspiciously high activity the days and weeks before. Reading the AAQ thread helps the gauge management integrity in the aquaculture sector.

Fish. Sorry to send you into a spin. I think CSS will certainly not dilute out existing holders too much because that would be diluting Hagen as well. At the end of the day CSS needs capital, lots of it, and to get that capital institutional investors are required. So while you give away a small part of the upside you also get a greater degree of certainty that A - CSS will be well funded and not going into the hands of the banks (which happened to TGR twice) and B - the SBT project can start to go ahead. A project that has a massive payback and will add significantly to all shareholders.

In regard to institutional inside information, that is something that companies and institutions need to be very very careful about. You are wrong to think that institutions are getting and trading on all this inside information being fed to them by companies. It is true that institutions get better access to companies, see their operations, talk to management, competitors etc but really that just gives you a good understanding of the business it doesn't make you an insider. Institutions who do have inside information are not allowed to trade in a stock or they risk losing their licence - your whole business would be destroyed. That is not to say there are not institutions who are unethical - that is to be expected. But I can tell you from experience those guys don't last long.

In regard to the bid of 86c you will find at the start of the day and at the end of the day the market has a "match" process where all bids and offers are matched out at the same price. This was introduced a few years ago to prevent stocks being manipulated at the end of the month or quarter by institutions trying to make their performance look better. From 4pm til 4.10pm (and from 10am til 10.10) all buyers and sellers put their stock in the screen for the match. So while at 4.10 in the afternoon you may see the bid at 86c and the offer at 55c there will be a whole group of trades between them. The ASX matches up trades and determines the final price based upon volumes and prices bid and asked and then all buyers and all sellers get the same price - which may be 78c. So while there are bidders at 86c, they are not expecting to pay 86c but rather the match price. They are only bidding 86c to get to the front of the queue. Your broker can tell you what the match price is going to be.

 

[Basilica]

Re: CSS - Clean Seas Tuna

Fish. Sorry to send you into a spin. I think CSS will certainly not dilute out existing holders too much because that would be diluting Hagen as well. At the end of the day CSS needs capital, lots of it, and to get that capital institutional investors are required. So while you give away a small part of the upside you also get a greater degree of certainty that A - CSS will be well funded and not going into the hands of the banks (which happened to TGR twice)

They are planning to raise 100 million 50% equity 50% debt in the future.
That will put their debt at 28 + 5 + 50 = $83 million interest alone could be between 8 and 12 million a year. Heaps more than they earn now.
Yes they can fail at the hands of the banks.
On the dilution of shareholders value topic the extra 50 M is a big chunck of the current market Cap and about 40% dilution (please check my calcs)
And if the worst happens The Family still owns the Wild Tuna catch licence and knows the secrets of SBT breeding.

 

[nizora]

Re: CSS - Clean Seas Tuna

12 May 2009
The Manager Companies
Australian Securities Exchange
89 King William Street
Adelaide SA 5000
CLEAN SEAS TO RAISE $24 MILLION
Clean Seas Tuna Limited (Clean Seas) is pleased to announce a $13.1 million Placement and an underwritten 1 for 8 Rights Issue to raise $10.9 million. Both equity raisings were at $0.55 per share.
The Placement was keenly sought by both professional and sophisticated investors both in Australia and overseas. Helmsec Global Capital Limited acted as Lead Manager for both the Placement and the Rights Issue. As the number of shares being issued is less than 15% of the shares already issued the company has not sought shareholder approval for the placement.
The 1 for 8 Rights Issue allows Clean Seas’ existing shareholders to further participate in the company’s growth plans. Clean Seas’ majority shareholder, Australian Tuna Fisheries Pty Ltd (ATF), has committed to take up $5 million of its entitlement under the Rights Issue. The remaining $5.9 million of entitlements under the Rights Issue have been fully underwritten by Lonsec Limited.
Overall the company will raise some $23.9 million from the equity issues. These funds will provide the company with the initial funding required for the commercialisation of aquaculture bred SBT from its onshore facility at Arno Bay in Spencer Gulf South Australia, commencing December 2009.
Commenting on the capital raising, Clean Seas’ Chairman Hagen Stehr AO stated
“The recent Southern Bluefin Tuna (“SBT”) spawning success over 35 days from 12 March 2009 and subsequent production SBT fingerlings has opened the door for commercial SBT aquaculture production from our next spawning scheduled for Oct/Nov 2009.
The capital raised from these equity raisings will be primarily directed to infrastructure and working capital related to the SBT business. This should allow the development of Australia’s first onshore SBT larval rearing facility at Arno Bay. We look forward to the commencement of sea cage grow out of SBT over the next summer.
The company is encouraged by the depth and extent of support from existing major shareholders, and recommends the Rights Issue to all shareholders”.
KEY DATES
Ex‐date for Rights Issue 13 May 2009
Record Date for Rights Issue 20 May 2009
Settlement of Placement 21 May 2009
Closing Date for Rights Issue 12 June 2009

 

[kenny]

Re: CSS - Clean Seas Tuna

I for one appreciate the detail in the Memorandum in the breakdown of use of the funds being raised. Can someone shed some light on how the 55c per share might have been calculated?

Also any ideas on the the rate of cash burn of the working capital? I'm assuming the Mulloway sale goes ahead and the Kingfish start contributing.

Cheers,

Kenny

 

[Basilica]

Re: CSS - Clean Seas Tuna

12 May 2009
CLEAN SEAS TO RAISE $24 MILLION
Both equity raisings were at $0.55 per share.

55c is a big discount to the 79c at the start of the trading halt.
No mention of fingerling survival.
or sales of mulloway for last Q. That i have found yet.
The readers of the local paper are very fortunate investers.

 

[Basilica]

Re: CSS - Clean Seas Tuna

I for one appreciate the detail in the Memorandum in the breakdown of use of the funds being raised. Can someone shed some light on how the 55c per share might have been calculated?

Also any ideas on the the rate of cash burn of the working capital? I'm assuming the Mulloway sale goes ahead and the Kingfish start contributing.

Cheers,

Kenny

Pure negiotiating Kenny
between institutions and Hagen on one side and CSS on the other.
31% discount