Aquabusiness Seafarms Group has committed to reviving Project Sea Dragon after the Federal Court ruled the subsidiary behind the prawn farm proposal be wound up.
Aquabusiness Seafarms Group has committed to reviving Project Sea Dragon after the Federal Court ruled the subsidiary behind the prawn farm proposal be wound up.
The group confirmed it intended to appeal the Federal Court’s decision and continue with the project, while releasing its half year results to the market yesterday.
Results for the first half of the 2024 financial year shows Seafarms recorded a revenue of $20.3 million but a loss of $6 million.
The $6 million net loss after tax was 52.5 per cent lower compared to the previous corresponding period, because of a reduction of construction expenditure on Project Sea Dragon, the group said.
“Given the ongoing use of cash resources to develop and secure financing for Project Sea Dragon the group continues to have an operating cash out flow,” Seafarms said in its ASX statement.
“Accordingly, the ability of the company and the group to continue as a going concern is dependent on its ability to raise further finance, reduce discretionary cash expenditure and mitigate operating risks.”
Despite this, Seafarms remained committed to Project Sea Dragon and said the company would appeal the Federal Court's decision to wound up the subsidiary operating the project.
Project Sea Dragon is a large-scale prawn aquaculture in northern Australia, to produce reliable black tiger prawns year round.
The project was put on hold when a Seafarms subsidiary responsible for the project – Project Sea Dragon Pty Ltd – was placed in voluntary administration in February 2023.
The Federal Court of Australia last week ordered the subsidiary be wound up, finding the vehicle was trading while insolvent since Seafarms Group stopped funding it.
Seafarms Group chief executive Rod Dyer said the Federal Court judgment was surprising.
“On review of the judgment, our view is that it contains significant errors in both fact and law,” he said.
“Those significant errors provide a sound basis for an appeal that ultimately, we believe, will be successful.
“Despite the judge’s decision to the contrary, we remain of the view that Project Sea Dragon is solvent because it is paying all of its debts as and when they fall due.”
Seafarms said all construction work on Project Sea Dragon has ceased but the group continued to undertake works to maintain all permits and approvals.
“Project Sea Dragon and Seafarms Group intend to appeal the decision and will be seeking a further stay of the order until the appeal is heard,” the group said on the ASX.
“Accordingly, Project Sea Dragon will continue its business as usual.
“[The project] is currently producing export product from Seafarms Queensland operations to build the export market for [the project] and continues to be very active in pursuing funding for Project Sea Dragon.”
