Rights issue approved, new distribution announced
For Immediate Release
31 March 2009
BLIS Technologies Ltd rights issue approved and new distribution announced
BLIS Technologies Ltd (NZX: BLT) (the ‘Company’), developers and manufacturers of advanced probiotics for oral healthcare, announces that it presented three resolutions to a special meeting of its shareholders earlier today and that these resolutions were voted on and passed. The first resolution sought approval for the purposes of the Company’s Constitution, the Companies Act 1993 and the Listing Rules to enable the Company to conduct a pro-rata renounceable rights issue for mandatory convertible cumulative preference shares (‘Preference Shares’) to its existing shareholders in the ratio of 1 Preference Share for every 45 existing ordinary shares held. The second resolution sought approval of the underwriting arrangements for the rights issue with Edinburgh Equity Nominee Limited (‘Edinburgh’) for the purposes of the Companies Act 1993, the Listing rules and the Takeovers Code. The third resolution sought shareholder ratification of a private placement of ordinary shares made to Edinburgh in July 2008 for the purposes of the Listing Rules.
The Company also announces that it has made further progress in the commercialisation of its products internationally, despite the difficult global economic conditions, with promising growth in the United States market resulting from its relationship with its distributor, Frutarom USA Inc., in respect of ingredient sales.
During the shareholders meeting, Dr Barry Richardson, Chief Executive Officer, took the opportunity to announce that two new regional supply and distribution agreements had been reached in the Asian markets of Korea and China. After several months of negotiation the Company has reached agreement with a Korean pharmaceutical company to distribute the Company’s range of retail pharmacy products (this range includes the eight unique products retailing in New Zealand) into the Korean market. ``We have had a long association with this Korean company, which has now evolved to the point where we have finalized an agreement for the distribution of our retail pharmacy line of products in the Korean market,’’ Dr Richardson said. Dr Richardson also explained to shareholders that the Company has also reached agreement with a New Zealand company and its partner company in China to manufacture, distribute and market the Company’s products. The Chinese partner company is based in the North Eastern region of China and is wholly owned by the Provincial Government. Dr Richardson told the audience that he was pleased with the two agreements and wanted to emphasize to shareholders that the agreements had been entered into after lengthy negotiations with the companies concerned and investigation of the relevant markets. ``Finding a regional distributor that we have confidence in is a difficult process in any market, but to have finalized an agreement with these two companies, for these key markets, is especially pleasing,’’ Dr Richardson said.
Dr Richardson told shareholders that the Company’s retail range of products offered a great vehicle for bringing the Company’s unique oral probiotic products to specific global markets, but that the process was governed by complex regulatory issues and differing regulatory requirements in each market. Dr Richardson emphasised to shareholders that the Company should not under-estimate the cost of regulatory compliance in entering international markets. He said that the prospect of getting the Company’s retail products distributed in Korea and China was very exciting for the Company, but the process still required careful and close management given the regulatory risks.
The Company plans on using shareholder funds from the rights issue to fund its working capital requirements and commercial development activities by supporting Frutarom USA Inc to launch the Company’s branded ingredient, BLIS K12, into Europe during 2009. The Company is also preparing to complete United States Food and Drug Administration (FDA) regulatory approval as a food ingredient in the United States by the end of the fiscal year and it will continue to pursue the commercialisation of the next generation of BLIS probiotics.