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Equity raising and change of listing

1
NZAX and media release

5 December 2012

Equity raising and change of listing to the NZX Main Board

MARKET UPDATE

Today, A2 Corporation Limited (“A2C” or “the Company”) announces that it is undertaking an equity raising to provide additional funding to accelerate the global growth initiatives outlined in the recently announced strategic review.

The Company will issue NZ$20 million in new equity and the Company’s three largest shareholders have resolved to sell a percentage of their holdings in the Company to new and existing investors (together “the Transaction”) at a fixed offer price of NZ$0.50 per new share (“Offer Price”) to provide additional liquidity, contemporaneous with a change in listing to the NZX Main Board, thus facilitating inclusion in the NZX50.

To this end, the Company has now made an application to NZX to list the Company and to quote its shares on the NZX Main Board.

A2C’s Managing Director Geoffrey Babidge said the success of a2TM brand milk in the Australian market has resulted in wider investor interest. “Following the recent announcement of the outcomes of the strategic review, there has been significant interest from new and existing investors eager to invest in A2C to allow the Company to accelerate its growth initiatives. The sell-down by A2C’s three largest shareholders and change in listing provides the Company with greater share liquidity and increases access to capital for future growth initiatives”, he said.

Details of the Transaction

The Offer Price of NZ$0.50 per new share represents a 22.7% discount to the volume weighted average price since 31 October 2012 (being the last trading day prior to the outcomes of the strategic review announcement).

The Transaction will be undertaken by way of a placement to eligible institutional investors, who will be invited to submit applications by 5.00pm NZDT Thursday 6 December 2012. Shares issued and acquired as part of the Transaction will rank pari passu with existing shares. Other key dates with respect to the Transaction are provided in the Private Placement Memorandum, which has been lodged today with NZX and is available on the Company’s website.

2
New equity issuance

The Company intends to use the additional funding to more aggressively pursue previously announced growth initiatives, including: - accelerating penetration of the UK liquid milk market; - accelerating penetration of the Chinese infant formula market; - increasing a2TM brand milk awareness in Australia and New Zealand; - entering the Chinese liquid milk market with UHT milk sourced from Australia or New Zealand; and - progressing a new “Priority 1” liquid milk market such as the US, Canada or Germany.

Partial sell-down by major shareholders

Three of the Company’s largest shareholders have resolved to sell a percentage of their holdings in the Company to new and existing investors, as follows:

- Freedom Foods Group Limited has resolved to sell up to 40 million shares;

- Mountain Road Investments Limited has resolved to sell up to 80 million shares; and

- EGI-Fund (08-10) Investors LLC has resolved to sell up to 20 million shares.

Freedom Foods Group Limited, Mountain Road Investments Limited and EGI-Fund (08-10) Investors LLC have held interests in the Company since July 2010, March 2004 and September 2008 respectively. Each shareholder’s investment in A2C has grown significantly in value as a result of the acceleration of the Company’s development.

All three shareholders see significant potential in A2C and plan to continue to support the implementation of the strategy announced following the recent strategic review. Consistent with this, all three shareholders have given standstill undertakings pursuant to which they have agreed not to sell any remaining shares in the Company until at least 10 days after the release of A2C’s full year result for the period ending 30 June 2013.

Change of listing to the NZX Main Board

All the requirements of NZX relating to the NZX Main Board application that can be complied with on or before the date of this announcement have been duly complied with.

In the New Year, the Company intends to appoint additional independent directors to assist in the developing market opportunities in Europe and China / Asia-Pacific.

An NZX Main Board listing is expected to provide the Company with further share liquidity and increase future access to capital. In addition, the Company has been advised by NZX that A2C is expected to be a “new stock” for NZX indices purposes as a result of its move from the NZX Alternative Market to the NZX Main Board. Therefore, following a move to the NZX Main Board, A2C may qualify for eligibility for index inclusion as early as February 2013.

3ENDS

Presentation0512.pdf

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