Seafarms : SFG Completion of Debt Conversion

Our Ref: SFG ASX Announce Debt Conversion App 3B 5 July 2017 (527)

5 July 2017

Market Announcements Office Australian Securities Exchange

ANNOUNCEMENT 527

Level 6 By ASX Online

20 Bridge Street Number of pages: 13

SYDNEY NSW 2000 (including this page)

A$2.5 million Debt Conversion and Appendix 3B

Further to its announcement on 2 June 2017, Seafarms Group Limited (ASX: SFG) (Company) is pleased to confirm that 41,666,666 shares were today issued to Avatar Finance Pty Ltd (Avatar Finance), with the proceeds ($2.5 million) being used to repay debt to Avatar Finance (Debt Conversion).

Attached is the Company's Appendix 3B relating to the Debt Conversion.

Should you have any queries with respect to the Appendix 3B, please do not hesitate to contact me. Yours faithfully

Seafarms Group Limited

Harley Whitcombe

Director and Company Secretary ENC

Appendix 3B New issue announcement

Appendix 3B

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

New issue announcement, application for quotation of additional securities‌ and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Seafarms Group Limited

ABN

50 009 317 846

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1	+Class of +securities issued or to be issued	Fully paid ordinary shares
2	Number of +securities issued or to be issued (if known) or maximum number which may be issued	41,666,666 ordinary shares issued pursuant to the Debt Conversion (see capital raising announcement to ASX dated Friday, 2 June 2017 for further information).
3	Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares.

+ See chapter 19 for defined terms.

04/03/2013 Appendix 3B Page 1

Appendix 3B

New issue announcement

4	Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities? If the additional +securities do not rank equally, please state: the date from which they do the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment	Yes.
5	Issue price or consideration	$0.06 per share.
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	The Debt Conversion has been undertaken to reduce the debt currently owed by the Company to Avatar Finance Pty Ltd. Further details of which are set out in the ASX announcement dated 2 June 2017 and Notice of Meeting dated 5 June 2017.
6a	Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b - 6h in relation to the +securities the subject of this Appendix 3B, and comply with section 6i	Yes.
6b	The date the security holder resolution under rule 7.1A was passed	25 November 2016
6c	Number of +securities issued without security holder approval under rule 7.1	Nil

+ See chapter 19 for defined terms.

Appendix 3B Page 2 04/03/2013

Appendix 3B New issue announcement

6d	Number of +securities issued with security holder approval under rule 7.1A	Nil
6e	Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)	41,666,666 (4 July 2017)
6f	Number of +securities issued under an exception in rule 7.2	Nil
6g	If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.	N/A
6h	If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements	N/A
6i	Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A - complete Annexure 1 and release to ASX Market Announcements	7.1 - 210,530,204 7.1A - 140,353,469
7	+Issue dates	5 July 2017
Number	+Class
8	Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)	1,403,534,699	Ordinary fully paid shares

Number	+Class
30,150,189	Convertible Preference Shares

9 Number and +class of all

+securities not quoted on ASX (including the +securities in section 2 if applicable)

+ See chapter 19 for defined terms.

04/03/2013 Appendix 3B Page 3