A2 taps AMP, Freedom Foods to fund Australian plant
By Jason Krupp
Dec. 20 (BusinessDesk) - A2 Corp., the specialist milk products manufacturer, has tapped investors AMP Capital Investors (New Zealand) and Freedom Foods Group for almost $4 million via a share placement to help fund construction of a processing plant in Australia.
AMP Capital has agreed to buy 30 million ordinary shares at 10 cents apiece, an investment of $3 million, while Freedom Foods is exercising a capital raising right to subscribe to 9.1 million shares, or $910,000, to maintain its 23% holding in the company, according to a statement released today.
The remainder of the A$7.5 million project is being funded by an asset finance facility provided by the company’s bankers.
A2 Corp said it "is very pleased with the endorsement of the milk processing facility and support from these two cornerstone shareholders".
The processing and packaging plant is being purpose built to supply demand in New South Wales, and will be leased under a long-term arrangement with the option to purchase. Production is expected to come on line in late 2011.
A2 Corp. produces dairy products that only contains the A2 type of beta casein protein, which it claims reduces the risk of several health conditions including heart disease, digestion problems and childhood diabetes. Standard milk contains both A1 and A2 beta casein proteins.
Product for markets in other Australian states will continue to be sourced from existing external processors.
Freedom Foods became a shareholder in May after A2 bought out its 50% stake in joint venture A2 Dairy Products in exchange for shares, after the two companies called off merger talks which would have created a $62 million ASX-listed company.
A2 shares were unchanged at 8 cents on the NZAX, and have traded infrequently in a tight range for much of the year.