Seafarms Group Limited, the company behind an ambitious project to build an enormous black tiger shrimp farm dubbed Project Sea Dragon, has completed the sale and leaseback of some of its farms.
In an announcement posted to the Australian Stock Exchange (ASX), Seafarms said it has successfully reached an agreement with Mainstream Aquaculture Property involving the sale and leaseback of certain assets owned by Seafarm Queensland, a wholly-owned subsidiary of Seafarms Group. The company said it has sold Farms 1 and 2 at Cardwell, receiving AUD 6.8 million (USD 4.4 million, EUR 3.8 million) in return with some adjustments for completion costs.
The company first announced the asset sale agreement in August 2024, which allowed Seafarm Queensland to continue operating Farms 1 and 2 until 30 April 2025 and retain ownership and continue operations at Farm 3.
"The proceeds from this transaction will enable us to make specific enhancements to certain operations, as we continue to focus on the core aspects of PSD – breeding, farming and processing world-class Black Tiger prawns for the export market,” Seafarm CEO Peter Fraser, who took the role in March 2024, said.
The company said that Mainstream and Seafarm Queensland have entered into leaseback arrangements allowing its operations at Farm 1 and Farm 2 to continue up to and including 8 January 2026.
“Our sale and leaseback strategy is yielding strong results, with sustained domestic demand for our Banana prawns and increasing international interest in our Black Tiger prawns,” Fraser said. “We are well positioned to capitalize on further growth opportunities across our key markets.”
Project Sea Dragon has had a troubled development. In April 2022, a former CEO claimed the project couldn’t proceed in its current form before resigning a month later at the behest of a major shareholder. Just under a year later, the company faced a complete trading halt on the ASX after SFG placed the project into voluntary administration before later announcing it remained committed to the project.
The company later got caught up in a lawsuit after a contractor it selected for the project, Canstruct, sued claiming Seafarms failed to pay an owed AUD 13.9 million (USD EUR) – a suit which resulted in an Australian federal court ruling the project should be liquidated and its administration “brought to an end.”
A judge later granted a stay on the liquidation, but in November 2024 Seafarms lost its appeal and the company said it would engage with appointed liquidators and work through the implications of the findings.
In February, those court-appointed liquidators decided to remove it from liquidation and place Project Sea Dragon back into voluntary administration. The company said at the time that it remained solvent. However in March, the Supreme Court of Queensland denied the application for leave by the liquidators to appoint themselves as administrators.
In its latest update Seafarms Group said it continues to address the proceedings related to Project Sea Dragon and its liquidators, is continuing its engagement with the liquidator “in respect of a prospective acquisition of the assets and undertakings of PSD.”
