Clean Seas' Hagen Stehr blamed mistakes in production for the problems with tuna spawning. (Photo: Stock File)
Clean Seas Tuna may delay plans
Tuesday, March 02, 2010, 21:30 (GMT + 9)
Clean Seas Tuna may have to delay plans to farm southern bluefin tuna in onshore tanks by a year, after the deaths of thousands of tuna fingerlings, which the company has blamed on production problems.
But founder and major shareholder Hagen Stehr and chief executive Clifford Ashford both on Monday backed the company's celebrated technology and said they were surprised at the reaction of the market, which on Friday wiped 59 per cent from the share price.
When Clean Seas released its half-year report on Friday, buried among the release was news its spawning program faced challenges and that none of the fingerlings had survived past 38 days. The news sent shares tumbling as nearly a quarter of the company's 418 million shares changed hands.
Ashford said while there was potential for fish to spawn this month, there was a strong chance the tuna program would need to be pushed back a year.
Stehr, who holds 22.6 per cent of Clean Seas' stock, said the problems with tuna spawning were because of mistakes in production, and that they should not have happened and could be overcome.
"It shocked us all, but we've got a fairly good idea of what we need to change," Stehr said, The Australian reports.
"We will make amends and aim to bring a totally different report to the market this June."
Stehr, who remains a director of Clean Seas, confirmed a Patersons Securities report that said an experimental bringing forward spawning to January and February (from March) was sporadic and that larvae that were produced were hit by a bacterial feed infection and had a poor conversion to fingerlings.
Newly installed chairman and former Santos chief executive John Ellice-Flint, who took over from Stehr in December, did not return calls on Monday.
In what some in the market were calling a "dead fish bounce", Clean Seas shares on Monday jumped 2.5c, or 26 per cent, to 11.5c. This was still a long way from the 22c they traded at before Friday's profit release.
Ashford said he did not know whether Macquarie and AMP, which had been on the share registry before the profit report, had sold out of the company.
Patersons, which participated in Clean Seas' recent AUD 42 million (USD 37.8 million) capital raising, kept its buy recommendation on the stock but reduced its target price from AUD 1.33 (USD 1.19) a share to AUD 1 (USD 0.90).
"While rebuilding will take time, we remain convinced that the fundamentals of the full-cycle tuna business are intact and that this is a buying opportunity," Patersons analyst Mark Simpson said.
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By Denise Recalde