ATM
05/12/2012 13:51
PLACE
REL: 1351 HRS A2 Corporation Limited
PLACE: ATM: Equity raising and change of listing to the NZX Main Board
Equity raising and change of listing to the NZX Main Board
MARKET UPDATE
Today, A2 Corporation Limited ("A2C" or "the Company") announces that it is
undertaking an equity raising to provide additional funding to accelerate the
global growth initiatives outlined in the recently announced strategic
review.
The Company will issue NZ$20 million in new equity and the Company's three
largest shareholders have resolved to sell a percentage of their holdings in
the Company to new and existing investors (together "the Transaction") at a
fixed offer price of NZ$0.50 per new share ("Offer Price") to provide
additional liquidity, contemporaneous with a change in listing to the NZX
Main Board, thus facilitating inclusion in the NZX50.
To this end, the Company has now made an application to NZX to list the
Company and to quote its shares on the NZX Main Board.
A2C's Managing Director Geoffrey Babidge said the success of a2TM brand milk
in the Australian market has resulted in wider investor interest. "Following
the recent announcement of the outcomes of the strategic review, there has
been significant interest from new and existing investors eager to invest in
A2C to allow the Company to accelerate its growth initiatives. The sell-down
by A2C's three largest shareholders and change in listing provides the
Company with greater share liquidity and increases access to capital for
future growth initiatives", he said.
Details of the Transaction
The Offer Price of NZ$0.50 per new share represents a 22.7% discount to the
volume weighted average price since 31 October 2012 (being the last trading
day prior to the outcomes of the strategic review announcement).
The Transaction will be undertaken by way of a placement to eligible
institutional investors, who will be invited to submit applications by 5.00pm
NZDT Thursday 6 December 2012. Shares issued and acquired as part of the
Transaction will rank pari passu with existing shares. Other key dates with
respect to the Transaction are provided in the Private Placement Memorandum,
which has been lodged today with NZX and is available on the Company's
website.
New equity issuance
The Company intends to use the additional funding to more aggressively pursue
previously announced growth initiatives, including:
accelerating penetration of the UK liquid milk market;
accelerating penetration of the Chinese infant formula market;
increasing a2TM brand milk awareness in Australia and New Zealand;
entering the Chinese liquid milk market with UHT milk sourced from Australia
or New Zealand; and
progressing a new "Priority 1" liquid milk market such as the US, Canada or
Germany.
Partial sell-down by major shareholders
Three of the Company's largest shareholders have resolved to sell a
percentage of their holdings in the Company to new and existing investors, as
follows:
Freedom Foods Group Limited has resolved to sell up to 40 million shares;
Mountain Road Investments Limited has resolved to sell up to 80 million
shares; and
EGI-Fund (08-10) Investors LLC has resolved to sell up to 20 million shares.
Freedom Foods Group Limited, Mountain Road Investments Limited and EGI-Fund
(08-10) Investors LLC have held interests in the Company since July 2010,
March 2004 and September 2008 respectively. Each shareholder's investment in
A2C has grown significantly in value as a result of the acceleration of the
Company's development.
All three shareholders see significant potential in A2C and plan to continue
to support the implementation of the strategy announced following the recent
strategic review. Consistent with this, all three shareholders have given
standstill undertakings pursuant to which they have agreed not to sell any
remaining shares in the Company until at least 10 days after the release of
A2C's full year result for the period ending 30 June 2013.
Change of listing to the NZX Main Board
All the requirements of NZX relating to the NZX Main Board application that
can be complied with on or before the date of this announcement have been
duly complied with.
In the New Year, the Company intends to appoint additional independent
directors to assist in the developing market opportunities in Europe and
China / Asia-Pacific.
An NZX Main Board listing is expected to provide the Company with further
share liquidity and increase future access to capital. In addition, the
Company has been advised by NZX that A2C is expected to be a "new stock" for
NZX indices purposes as a result of its move from the NZX Alternative Market
to the NZX Main Board. Therefore, following a move to the NZX Main Board, A2C
may qualify for eligibility for index inclusion as early as February 2013.
For further information contact:
Geoffrey Babidge
Managing Director
A2 Corporation Limited
+61 2 96977008
A2 Corporation Limited
A2C is a differentiated, premium-priced dairy company which is building a
global business based on unique intellectual property relating to a2(TM) milk
and related products.
A2C has operations in Australia, New Zealand, the UK and China and is
pursuing growth opportunities in Asia, North America & Europe.
End CA:00230722 For:ATM Type:PLACE Time:2012-12-05 13:51:02
