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Milk company A2 to raise $20m to boost sales

Last updated 05:00 06/12/2012

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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 while the three major shareholders are selling down up to a combined 140 million shares.

The sell-down 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.

It may achieve that by February next year, it said.

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.

A2 has shifted its promotional efforts over the years from the scientific debate to promoting its products to people who have digestive problems with standard milk and placing emphasis on the consumer benefits.

The $20m of new capital will be used to establish new markets and speed up sales and marketing in markets where the A2 milk products are already sold. These include the United Kingdon, China, and Australia.

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