Shares in organic in infant formula maker Bellamy’s jumped in early trade.
A short time ago, they were up 14% to $7.35. They are still a long way from the 12-month high of $15.07.
Last week the company raised $14.3 million from institutions at $4.75 a share, part of a $60.4 million equity capital raising to fund a series of measures to restart sales growth in China.
The company is buying 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.