Bega raising $160m from share market

Bega raising $160m from share market


Dairy
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Bega is beefing up its capital strength to prepare for more food and dairy business growth

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Just ahead of its $460 million takeover of the Mondelez spread business, Bega Cheese is launching a $160 million capital raising to shore up it capital base.

Bega says it wants to be prepared to take advantage of future food and dairy growth opportunities and hopes to raise about $122.5m from an institutional placement.

A $37.5m share purchase plan has also been opened up to all existing shareholders.

The institutional offer involves almost 23m new fully paid ordinary shares which will represent about 15 per cent of Bega’s issued capital, at an issue price of $5.35/share.

The price represents a 10pc discount to Bega Cheese’s closing price of $5.95 on Thursday night.

Existing Bega Cheese shareholders will be able to subscribe for up to $15,000 new shares, subject to scale back, without incurring brokerage or transaction costs.

The issue price will be $5.25, or a 10 cent discount to institutional offer and a 10.4pc discount to the past five-day weighted average trading price of $5.8c.

“This capital raising gives us the financial strength and flexibility to grow our dairy and food businesses as part of our vision to be a great Australian food company,” said executive chairman, Barry Irvin.

Mr Irvin said 20116-17 had been a significant year for Bega Cheese with the “company-changing” acquisition of the Mondelez grocery business, including Vegemite, Kraft peanut butter, salad dressings and cheese lines.

That deal is being concluded this month.

It has been followed by a transaction with Mead Johnson which included the sale of a spray dryer and an infant formula finishing plant for $200m with 10-year access and service agreement which secures revenue and income streams from the plants.

Bega also confirmed a current estimate of full-year earnings before interest tax depreciation and amortisation was about $67.4m.

The NSW South Coast based business has reserved the right to scale back applications under the share offer if the total demand exceeds $37.5m, or to limit shareholders’ investment stakes as required by its constitution.

However, Bega Cheese may also decide to increase the cap to reduce or eliminate the need for a scale back.

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