Bubs Australia capital raising oversubscribed

http://www.theaustralian.com.au/bus...d/news-story/b38b7b22d6a321664dbdcf75efc34689

The fledgling listed infant formula and baby food producer backed by entrepreneur Albert Tse has raised almost $16 million from investors in a capital raising that closed in less than an hour this week.
Bubs Australia (BUB) revealed today that a fully underwritten institutional share placement had raised $15.9m at 45 cents per share from professional and sophisticated investors in Australia and internationally.
It is understood the raising for one of the hottest stocks on the sharemarket this year was substantially oversubscribed given the shares closed at 62 cents before going into a trading halt on Wednesday.
They almost reached $1 last week after being issued earlier this year at 10 cents.
Bubs said the proceeds of the placement would be used to “improve the company’s financial flexibility and working capital to take advantage of future growth opportunities’’.

It is understood Ellerston Capital, which reduced its shareholding below 5 per cent in the company in March, participated in the raising.

Dennis Lin, Chairman of Bubs Australia, said: “We are very pleased with our capital raising. It has brought in a strong backing of new institutional investors and private investors, while cornerstone investors have increased their positions.

“Bubs’ exclusive partner and an authorised distributor in China, Brilite Nutritionals (Shanghai), has also taken a stakeholding as they share our vision for expansion plans into China. We would like to thank all who have made it such a great success.

“The oversubscription is a terrific vote of confidence in Bubs vision and our ambition to become a leading brand in the premium organic infant food and the specialty infant milk formula segments, both here and overseas, principally in Asia.

“Following the placement we will be well positioned to continue to build on the momentum established since listing in January this year.

“We will utilise the funds raised to invest in working capital and continue to progress our four-pillar strategy, including expanding our domestic penetration, marketing and brand development, strategic opportunities and product innovation, and enhanced focus on China and the Asia region,”
Bubs shares closed more than 10 per cent lower on Tuesday after the company reported a statutory pre-tax loss of $5.04 million for 2017.

Executive Nicholas Simms said the result reflected a “business in transition’’ after the company backdoor-listed on the ASX in January in an IPO backed by Ellerston, Kerry Stokes and a $200m private equity fund called Wattle Hill, established last year by Mr Tse, the husband of former prime minister Kevin Rudd’s daughter Jessica Rudd.
Mr Simms said Bubs expected increasing demand in key domestic retail accounts. The group had cash on hand of $5.3m at year’s end and said revenues were up 25 per cent in the second half versus the first half.