Keytone Dairy Corp launches prospectus to raise A$15M, list on ASX
By Rebecca Howard
May 10 (BusinessDesk) - Keytone Dairy Corp, which owns a dairy factory in Christchurch, has launched a prospectus to raise up to A$15 million and list on the Australian Securities Exchange via an initial public offering.
It is aiming to raise A$12 million or up to A$15 million with oversubscriptions to facilitate a listing on the ASX through the issue of 60 million (up to 75 million with oversubscriptions) shares at an issue price of 20 Australian cents apiece, with the offer due to close on June 1. Peloton Capital is the lead manager for the sale.
Once listed, the company will have a market capitalisation of A$30 million, based on the IPO issue price and after the maximum subscription of A$15 million is raised, it said in a statement.
Keytone Dairy was created last September to acquire Keytone Enterprises, which is incorporated in New Zealand, and to manage and operate Keytone’s business.
In April it entered an exchange deed with the current shareholders of Keytone to acquire 100 percent of the issued share capital in consideration for the issue of an aggregate of 75,000,000 shares and 49,500,000 performance shares.
If the full oversubscriptions are raised the current shareholders will own approximately 50 percent of the shares. According to the Companies' Office, shareholders include New York-based investor Bergen Asset Management's Long Hill Capital, which has 44 percent, chief operating officer Vivienne Cheung, with 34 percent, managing director James Gong, with 16.8 percent and general counsel Richard Fyers, with 5 percent.
Keytone built a state-of-the-art dry powder facility in Sockburn in 2013, where it blends and packages milk powder, sheep milk powder, kiwifruit milk powder and lactoferrin under its own brands as well as manufacturing a range of powdered dairy products for supermarkets and other customers under their own private label brands. The company last year bought two adjacent sites in the Izone Industrial Park in Rolleston where it plans to build new manufacturing facilities enabling it to expand into new products and markets.
Funds raised from the IPO will be used to expand its manufacturing base from its one existing facility, substantially expand its product range into complementary high-margin, value-added products, expand its existing distribution network and develop distribution in additional geographic markets.
“We believe that the ASX listing will turbocharge Keytone Dairy’s growth. Keytone Dairy has already purchased land for two new manufacturing facilities it plans to build, in addition to its purpose-built existing Christchurch facility," Australian-based non-executive chair Bernard Kavanagh said in a statement.
He previously told BusinessDesk that the company chose a listing in Australia over New Zealand because its key shareholder was already familiar with the ASX market and saw more opportunity for tapping investors in Australia.
Keytone Dairy holds a China Certification and Accreditation Administration (CNCA) license, a pre-requisite for the importation of dairy products into the People’s Republic of China. It is also Halal-certified, enabling exports into Muslim countries.
Keytone Dairy’s products are exported globally, including to China, for sale in a variety of channels, including major supermarket chains, premium retail channels and online marketplaces.