US fund Delta Partners has grabbed a key stake in Bellamy's

Union Cavalry troopers charge with sabres during a re-enactment of the Battle of Gettysburg. Karen Bleier/AFP/Getty Images

US-based private equity and investment group Delta Partners has gone on market to buy a key 5.5% stake in troubled Tasmanian infant formula company Bellamy’s.

A short time ago, Bellamy’s shares were up 2.3% to $3.90.

The company earlier this month pushed out CEO Laura McBain, cut its profit guidance again and saw the share price slide to less than a third of the value of its year high of $15.38.

Two funds run by Delta, Prism Partners and Prism Offshore, told the ASX today they had bought 5,330,000 shares at an average of $3.94 each, a total of about $21 million.

Delta Partners hasn’t revealed whether it will support a vote next month at a shareholder meeting to spill four board of director positions.

The Black Prince Private Foundation, connected to Kathmandu founder Jan Cameron, has 14.48% of the company’s shares and wants to replace the four members of the board with its own nominees.

The shareholder meeting to decide the board makeup will be held at the Park Hyatt in Melbourne on February 28.

Sales in China of the company’s organic infant formula hit a speed bump when China changed regulations requiring registration.

This caused a wave of discounting which left Bellamy’s high-end product sitting in warehouses unsold.

Facing overproduction and being left with stock it couldn’t sell, Bellamy’s renegotiated a supply agreement Fonterra, the world’s biggest dairy exporter, reducing production.

The company now expects full year revenue to be in the range of $220 million to $240 million, at best flat on 2015 and well below previous analyst expectations of about $330 million.

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