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XTV Networks Ltd (ASX: XTV) has been involved in developing and commercialising its technology, helping organisations in building and controlling the messaging and content within their own enterprise media networks. However, the company is now trying to change its nature of business as it is trying to enter into the seafood market. Today (i.e., 23 April 2019), the company announced that it has entered into a share sale deed to acquire 100% of the issued share capital of New Zealand Coastal Seafoods Limited (NZCS).
NZCS is a New Zealand-based processor, distributor and exporter of seafood products which operates a seafood processing and drying facility in Christchurch, New Zealand. The products of NZCS are generally targeted at Asian populations who value associated perceived health and beauty benefits, such as the collagenrich ling maw.
XTV believes that the proposed Acquisition of NZCS will help it in changing its nature and scale of its activities from a technology company in the media and entertainment industry to a seafood production and distribution company.
Currently, the company is planning to raise between $5,000,000 and $10,000,000 under the Capital Raise at an indicative issue price of $0.04 per Share. The proceeds of the Capital Raising will be used to expand NZCSâ manufacturing capacity of its existing products. The proceeds will also be used to expand NZCSâ product range and the sales force and consequently the range of distributors, direct customers, and geographic markets for NZCSâ products. Currently, the global aquaculture market is worth more than US$160 billion and it is estimated that over 180 million tonnes of seafood are consumed annually as per the Organisation for Economic Co-operation and Development. Most of the food is consumed in the Chinese and Southeast Asian regions where demand is growing rapidly.
In conjunction with the Acquisition and the Capital Raising, the Company is also considering undertaking a share split of its issued capital which is intended to facilitate a more appropriate issue price for the Capital Raising. Further, the company is having discussions with potential lead managers with a suitable capability to assist the company with the capital raising and the Acquisition.
It is proposed that with this acquisition, Cataldo Miccio, a co-founder of NZCS, will be appointed as a director of the Company. The company is also planning to appoint Peter Win, a co-founder of NZCS, as Chief Executive Officer.
The Company expects that all Shares to be issued in relation to the acquisition will be subject to ASX imposed escrow for 24 months from the date of reinstatement of quotation of the Companyâs Shares on ASX.
The acquisition is subject to various necessary Shareholder approvals. If the Company is not able to receive the necessary Shareholder approvals for the Acquisition by 16 June 2019, the Company will be removed from the Official List of ASX given that, at the relevant time, the Companyâs securities will have been suspended from quotation for a continuous period of 3 years.
The companyâs shares are currently suspended, and it will remain suspended from quotation until the Acquisition is completed.
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