Bellamy's announced its second trading halt in a month after its Chinese licence was cancelled

Photo: China Photos/ Getty Images.

Bellamy’s went into another trading halt this morning, after its new Victorian acquisition has had its license suspended by Chinese authorities.

It’s another roadblock for Bellamy’s, which makes organic infant formula, following a separate trading halt in mid-June.

The previous halt was to announce a $60 million capital raising, to fund its purchase of canning factory Camperdown Powder. That capital raising was completed earlier this week.

The company ran into trouble late last year, after regulatory changes in China which forced companies importing food products to be registered with the appropriate licence.

The purchase was a key strategic acquisition because Camperdown Powder has a CNCA licence, which would in turn allow Bellamy’s to meet the necessary importing requirements.

The trading halt this morning came on the news that Camperdown Powder’s license has unexpectedly been suspended by Chinese authorities.

The latest development highlights the risks involved for Australian companies doing business in mainland China.

Bellamy’s announced to the ASX this morning that its shares would go into another trading halt pending an investigation into the sudden cancellation.

The company has been embroiled in a series of controversies and profit downgrades since late last year, following regulatory changes in China which put a halt to its run of growth in the Chinese market.

The shares were put into a halt at $6.74. The stock fell as low as $4.14 earlier this year, down from a 12-month high of $15.38.

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