Taylor: Clearwater buys into biotech

[Canada] Clearwater Fine Foods Inc. of Halifax is pumping more funds into renewable energy company BIOX Corp. of Hamilton, Ont.

The company reported it has, through wholly owned subsidiary FP Resources Ltd., acquired an additional 1,630,500 common shares, or 3.56 per cent of BIOX, for a total price of $1.3 million, about 80 cents per share.

The shares were acquired via the Toronto Stock Exchange and were purchased for investment purposes, according to a Clearwater Fine Foods statement.

Stan Spavold, executive vice-president of Clearwater Fine Foods, says the firm is a diversified holding company controlled by co-founders John Risley and Colin MacDonald.

Clearwater Fine Foods reportedly has $2.7 billion of assets under management, including controlling interest in Clearwater Seafoods Ltd., and it is a major shareholder in Ocean Nutrition Canada Ltd., a maker of fish oil capsules, and Columbus Communications, a Caribbean provider of undersea fibre and broadband services to 22 countries in the region.

The Nova Scotia holding company has indicated that it or its subsidiary may increase or decrease its holdings of common shares from time to time, depending on market and other conditions.

Clearwater Fine Foods now holds, directly and indirectly, an aggregate of 8,346,936 common shares of BIOX — 1,402,500 common shares directly and 6,944,436 common shares indirectly through FP Resources — representing about 18.26 per cent of the company.

A well-known Nova Scotia businessman, Risley has long held an interest in renewable sources of energy.

About five years ago, researchers at Ocean Nutrition in Dartmouth discovered a strain of oil-producing algae, which seemed capable of producing oil at a greater rate than other types of algae used for the production of biofuels.

Although control of Ocean Nutrition Canada was sold in 2012 to Dutch nutritional supplement company Royal DSM for $540 million, the biofuel development business was not part of the deal.

In 2013, it was revealed that Risley had become president of a new Nova Scotia company, Mara Renewables Corp., a spinoff from Ocean Nutrition, which planned to produce lipids, or fats, from algae that could be turned into jet fuel and other products.

The CEO of Mara at that time was Tim Haig, founder of BIOX.

Spavold, also a director of BIOX, told me Monday that Mara is still part of Clearwater Fine Foods, majority-owned through an intermediary holding company.

“Mara and BIOX would be sisters, so to speak, and have no inter-company shareholding at this time,” he said in an email.

Meanwhile, BIOX bills itself as a renewable energy company, which designed, built, owns and operates a biodiesel production facility in Hamilton capable of producing 67 million litres of biofuel annually.

The company’s stated mission is to build, acquire, own and operate a network of biodiesel production facilities, utilizing proprietary process technologies.

BIOX management recently released second-quarter and six-month results. It showed the company lost $2 million (four cents per share) during the three-month period, which ended March 31.

During the same quarter in 2014, BIOX lost $23 million (50 cents per share).

For the six months ending March 31, BIOX reported net income of $2.3 million (five cents per share), which the company said was due to a provision and impairment charge in the first six months of the previous year.

The company also gained from the retroactive recognition of about US$6.5 million of revenue related to the reinstatement of the biodiesel tax incentive in the United States on Dec. 19.


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