a2MC, the company behind the a2 Milk brand, announced plans earlier today to raise NZ$40m (US$26.5m) through the offer of Placement Shares "to institutional investors in New Zealand, Australia and other selected international jurisdictions."
Following this, a2MC aims to bring in a further NZ$3m (US$2m) through a Share Purchase Plan.
“The new capital raised will be used to support a2MC’s continued growth in Australia and New Zealand and its targeted international markets of China, the UK and the USA," the company said in a statement.
“The new capital raised will be applied primarily to fund increasing working capital associated with the significant growth in infant formula in ANZ and China."
Sales of the company's a2 Platinum infant formula in Australia, New Zealand and China are growing.
Milk, cream, ice cream and yogurt are also sold under the a2 brand in Australia.
a2 Milk, which is also available in the UK and US, currently controls a 9% value share of the fresh milk market Down Under.
It is rich in beta casein protein, but contains no A1 beta casein protein, which has been linked to digestive discomfort.
Expression of Interest
Efforts to raise capital follow the failed bid by Freedom Foods and US dairy giant Dean Foods to acquire a2MC.
In June, a2MC received an Expression of Interest (EOI) from Freedom Foods and an "unnamed leading international" dairy later confirmed as Dean Foods.
In July, a2MC said it would not recommend the deal to its shareholders.
It said later there had been "no further communication" between it, Dean Foods and Freedom Foods, and that it was not expecting a revised offer from the parties.
“Although there has been no formal withdrawal of the Expression of Interest, the Board continues to consider that no takeover offer is imminent," it said on August 31.