The good news from Murray River Organics (ASX code MRG) is the NAB has agreed not to pull the plug. The bad news is the dried fruit company needs more money. It is borrowing an extra $3 million-plus and will almost certainly be passing the hat around shareholders.
That will be a year since it raised $12m in a share issue, and just over 18 months since they came to the stock market with a $35m initial public offer.
The Punter suspects Murray may be a classic example of a company that became overconfident after initial successes, and expanded too quickly. All he can do is cross his fingers, hoping the new team, who overthrew the board of directors in January, can turn things around.
One of the Punter's riskiest investments, Wide Open Agriculture (WOA), had a disappointing opening on the ASX on Friday, quickly slipping from 20 cents to 16c.
WOA began in March 2015, seeking "to regenerate ecosystems and communities in the WA wheatbelt". The chairman, Anthony Maslin, says it originated from his quest for positive change, following the death of his children on Malaysian Airlines flight MH17.
According to the prospectus it aims for four measurable returns: financial, natural, social and inspirational. It is the first such "four returns" company to list on any stock exchange.
It grows seasonal vegetables and is also jointly managing a 310-hectare sheep and cropping farm, where 20 per cent of the land will be planted as a nature reserve, and 30pc reserved for sheep and native shrubs.
A key risk is that it is a very young company. Losses in the six months to the end of December increased from $267,000 to $612,000. Perhaps most concerning, it wants to use the $5m raised in the float partly to expand into manufactured foods, which makes sense but is an area in which the company has not yet been tested.
- The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.
