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COMPANIES

Stokes family backs infant food float Bubs


Seven Group executive chairman Kerry Stokes.

• DAMON KITNEY
• The Australian
• 12:00AM January 3, 2017
• • 
    

The billionaire Stokes family has emerged as a backer of an infant formula and organic baby food company known as Bubs Australia that will be the first listing of 2017 when it hits the Australian Securities Exchange today.

Kerry Stokes’s family joins Chinese internet celebrity and the wife of the founder of e-commerce giant JD.com, Zhang “Nancy’’ Zetian, Ellerston Capital and Chinese entrepreneur Albert Tse among the top 20 backers of Bubs, which has raised $5.15 million to bankroll its local and Chinese expansion plans.

Allocations for the listings were scaled back by as much as 80 per cent despite the turmoil that engulfed the sector following a shock profit warning in early December by former market darling Bellamy’s, the organic baby food and infant milk formula company.

Just before Christmas Bellamy’s asked for a three-week extension to a trading suspension. At the same time dairy companies a2 Milk and Bega Cheese moved to reassure investors about their exposure to China.

ASX filings show Mr Stokes’s Wroxby, an associate company of his listed Seven Group Holdings, has emerged with 0.63 per cent of Bubs. His key adviser Warwick Smith sits on the investment committee of Mr Tse’s new $200m private equity fund known as Wattle Hill, which has emerged with an 8.3 per cent stake in Bubs.

The investment committee of Wattle Hill includes Ellerston chairman Ashok Jacob, former NSW premier Nick Greiner and AFL commissioner **rielle Trainor.

Mr Stokes already has interests in cattle stations, while Wroxby has acquired a holding of 19.6 per cent in Brisbane-based honey producer Capilano Honey.

Other backers of Bubs include Melbourne IVF founder John McBain and BDO partner Dennis Lin.

Bubs claims to have launched the first Australian goat milk infant formula, while its organic baby food products are sold in Coles supermarkets, department stores and on JD.com, among other e-commerce platforms in China.

A quarter of the float proceeds or $1.4m will go towards implementing Bub’s market penetration strategies, while a further 20 per cent or $1.1m will go towards growing domestic sales and expanding Bubs from an Australia-focused brand to a global brand. This will include new infrastructure and resources in southeast Asia, including China and Hong Kong.