Organic infant formula maker Bellamy’s has just closed an equity raising of $60.4 million to restructure and future proof itself from changes in regulations in its biggest market, China.
The 5 for 38 retail offer at $4.75 a share has closed, raising $45.5 million, adding to the more than $14 million from institutions last month.
The company now also has an indirect 90% interest in milk powder processing business Camperdown Powder Pty Ltd for $28.5 million.
Camperdown has a CNCA (Certification and Accreditation Administration of the People’s Republic of China) licensed powder products blending and canning line in Braeside, Victoria.
This essentially gives Bellamy’s a China label, shelf-ready with all the paperwork needed to go straight to mainland China consumers.
Bellamy’s spectacular growth via China suddenly stalled late last year following regulatory changes.
The fallout from falling sales claimed the scalp of CEO Laura McBain, stripped millions of dollars from the market capitalisation and sparked a shareholder revolt which ended with a change in the board of directors.
The company in February posted a 47% drop in first half profit to $7.236 million following problems with sales of its organic infant formula in China.
Bellamy’s is forecasting a 2017 EBIT (earnings before interest and taxes) loss of $9.5 million to $14 million.