Patience pays off for leftover chicken investors

By Nicholas Bryant

Friday 17th March 2000

About 300 patient investors who sat tight with the remnant of failed total-supply-chain chicken venture Iddison Vietnam are being asked to dip back into Asia and look for gold.

Zedex, formerly Iddison Holdings, the in-specie distribution arm of Iddison Vietnam - now hot stock IT Capital - is going gold mining in Vietnam.

And there is a fair chance those who have remained will be there with metaphorical pick and shovel after Zedex chairman Dave Seton showed them all into technology investor IT Capital.

A year ago Iddison Vietnam, short of money, gave shareholders an October 2000 issue of 1c options with an exercise price of 17.5c.

IT Capital's share price was 7c and the options were essentially worthless. Today they're worth about 50c, having gone as high as 85c, and those who took a punt on IT Capital's ordinary shares have seen them go from 7c to about 70.

Mr Seton is seeking to raise about $1.7 million by way of a non-renouncable rights issue of four new shares at 10c for every share held.

"The issue price has been kept low to encourage participation and ensure existing shareholders are rewarded for their loyalty," Mr Seton said.

The proceeds of the issue, which has been fully underwritten by Paua, a company held by Mr Seton, his brother Paul and others, would enable further exploratory drilling to take place on an existing gold project. The money would also be used for Zedex to increase its shareholding in Canadian company Olympus Pacific Minerals.

At IT Capital's birth those assets outside its business direction were distributed to Iddison Vietnam shareholders. That included shares in Olympus and a direct interest in the mine.

A fully subscribed rights issue would to all intents and purposes allow Zedex to control the project.

The area Zedex wants to extend prospecting in has been producing gold for peasant artisans for many years, according to promoting broker Forsyth Barr.

"We're talking reasonably considerable production on live targets so this is not pie in the sky," Forsyth Barr broker Duncan Priest said.

Mr Seton said Zedex's other projects in Vietnam were being reconsidered, with a chance funds from the issue would assist reactivation if appropriate.

As Iddison Vietnam the company attempted to become that country's version of Inghams Chicken, contracting to growers and managing product to supermarkets. But Vietnam, where most chickens arrive at market on the back of a bicycle, proved too tough a place to change quickly.

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