Seafarms Group has completed the acquisition of Project Sea Dragon's assets, clearing legal hurdles and advancing its prawn farming operations while actively pursuing new funding to support growth.
- Acquisition of Project Sea Dragon assets finalised for $750,000 plus GST
- 177 tonnes of banana prawns harvested, with black tiger prawn harvests commencing
- Quarterly sales revenue reached $4.9 million from domestic and export markets
- Operating cash outflow of $3.6 million amid ongoing project development
- Finance facility increased to $16.5 million, largely drawn down
Clearing Legal Hurdles
Seafarms Group Limited (ASX – SFG) has taken a significant step forward by completing the acquisition of all non-cash assets and undertakings of Project Sea Dragon Pty Limited, which was in liquidation. This $750,000 plus GST transaction, finalised in mid-December 2025, resolves years of legal uncertainty surrounding the project. The acquisition transfers key licenses, approvals, and agreements to Seafarms’ wholly owned subsidiary Sea Dragon Shrimp Pty Limited, although some licenses require new applications supported by government authorities.
One outstanding legal matter involves funds held by the Federal Court, originally provided by Seafarms to fund a now-voided Deed of Company Arrangement. A court judgment is pending, with Seafarms optimistic about reclaiming these funds, which would bolster its cash position. Even if the liquidators prevail, Seafarms, as the largest creditor, stands to recover most of the funds after liquidation costs.
Operational Progress and Production
On the operational front, Seafarms reported a successful harvest of 177 tonnes of fresh cooked banana prawns during the December quarter, primarily targeting the Christmas market. This marks a substantial increase compared to the previous quarter’s 22 tonnes of tiger prawns harvested. Additionally, the company has commenced harvesting its black tiger prawn crop, contributing to a total production of 184 tonnes for the quarter.
Sales revenue for the quarter reached $4.9 million, driven by domestic sales of fresh banana prawns, exports of frozen black tiger prawns to Europe, and the sale of 8.7 million post larvae (PLs) from its hatchery to other Australian producers. These PL sales underscore the success of Seafarms’ domestication and breeding programs conducted in Queensland and Western Australia.
Financial Position and Funding Strategy
Seafarms’ operating cash outflow for the quarter was $3.6 million, a reduction from $5.3 million in the previous quarter, reflecting ongoing investment in project development. Capital expenditure included the $750,000 payment for Project Sea Dragon’s assets. The company’s finance facility with Avatar Finance was increased to $16.5 million and is nearly fully drawn, with interest capitalised monthly.
Looking ahead, Seafarms is actively engaging with multiple potential funders to secure project financing and aims to reach a Final Investment Decision within the current financial year. To bridge funding needs, the company is exploring asset sales and additional borrowings. The anticipated resolution of the Federal Court funds dispute could also provide a timely cash injection.
Outlook
With legal uncertainties largely resolved and production ramping up, Seafarms is positioning itself for accelerated growth in the premium prawn aquaculture sector. The company’s ability to secure financing will be critical to advancing the Sea Dragon Shrimp project and sustaining operational momentum.
Bottom Line?
Seafarms’ next moves on funding and court outcomes will be pivotal for its ambitious prawn farming expansion.
Questions in the middle?
- When will the Federal Court deliver its judgment on the disputed funds?
- What are the terms and timelines for the potential project financing currently being negotiated?
- How will production volumes and sales evolve as the Sea Dragon Shrimp project scales?