A2 Corp to raise up to $20 million
Alternative milk company A2 Corporation has announced a $20 million capital raising to speed up its global sales plan.
All up, some 180 million shares will be available for investors in A2 at 50 cents each.
The $20m capital raising will involve the issue of 40 million shares at 50c each while the three major shareholders are selling up to a combined 140 million of their shares at 50c each.
The selldown by the three will provide greater liquidity in trading of the shares and is part of the company's application to shift to the main NZX board.
A2 markets milk containing only the A2 type of beta-casein while standard milk contains the A1 type. Research has been inconclusive so far on the health benefits of A2 milk, but many consumers believe in its qualities.
The $20m of new capital will be used to establish new international markets and speed up sales and marketing in markets where the A2 milk products are already sold. Markets for their milk include the United Kingdom, China, and Australia.
The 50c issue price is a 22.7 per cent discount price to the average share price since October 31, the last trading day before the outcomes of the strategic review were announced.
The share issue is through a placement of shares to institutional investors who are invited to submit their applications for shares by 5pm tomorrow.
The three main shareholders are Freedom Foods Group (selling up to 40 million shares), Mountain Road Investments (selling up to 80 million shares) and EGI-Fund (selling up to 20 million shares).
A2 Corporation has 604.66 million shares on issue.
The three shareholders said they would continue to support the strategic plan.
They have agreed to not sell their remaining shares until at least 10 days after the release of A2's full year result for the year to June 30 next year. The annual result usually comes out in August.
The shares will remain in a trading halt while a book build process, in which institutional investors apply for shares, takes place.