Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


A2 to raise $20M in placement, big shareholders sell down

A2 to raise $20M in placement, big shareholders sell down to allow main board listing

Dec. 5 (BusinessDesk) - A2 Corp, which markets milk products with a protein variant claimed to have health benefits, plans to raise $20 million in a placement while its three major shareholders will sell down their stakes, boosting liquidity to allow a shift to the NZX main board.

The Sydney-based company has been listed on the NZAX market since 2004 and in that time has grown to $411 million – bigger than some existing companies on the NZX 50 Index. But more than half the shares are held by three investors, meaning the company’s ‘free float’ is smaller.

ASX-listed Freedom Foods Group owns about 26 percent, Mountain Road Investments, associated with chairman Cliff Cook has 22.7 percent and Equity Group Investments has 8.3 percent currently. Their holdings will reduce to 18 percent, 8.9 percent and 4.6 percent respectively after the selldown.

The placement to institutions and the selldown are both priced at 50 cents a share, a 26 percent discount to the price they last traded on the NZAX of 68 cents before being halted. They remain in trading halt pending the placement. Inclusions in the NZX 50 could happen as soon as February next year.

Managing director Geoffrey Babidge said the funds will be used to drive its global growth, specifically targeting the UK liquid milk market, the Chinese infant formula market, lifting awareness of the A2 brand in Australia and New Zealand, entering the Chinese liquid milk market with UHT milk and going after another key market such as the US, Canada or Germany.

Freedom Foods, Mountain Road and Equity Group have undertaken not to sell any more of their shares until at least 10 days after the release of A2’s results for the year ending June 30, 2013.

The shares have soared 179 percent this year as sales soared in Australia, it began selling infant formula into China and expanded in the UK. Profit in the year ended Jun 30 more than doubled as revenue jumped 44 percent. The bulk of sales were in Australia.

The plan to raise $20 million follows more modest capital raisings, adding up to $7.7 million last year. As at June 30 it had cash on hand of $6.6 million and little or no net debt.

Last month, in announcing the results of a strategic review, the company confirmed it would continue to be “capital light,” relying on partnerships to drive its growth into new dairy markets and categories.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news