Shares of New Zealand’s a2 Milk (a2M) have been placed on a trading suspension on both the Australian and the New Zealand Stock Exchanges as it seeks to raise NZ$40 million (US$26.8 million) in new equity.

 

The funds will be raised through a fully underwritten placement of ordinary shares to international investors in Australia, New Zealand, as well as other markets, and will be used to fund an increase in working capital needed to meet the growth in the infant formula market in Australia, New Zealand, and China.

 

a2 has appointed Goldman Sachs NZ to act for the placement, which will have its placement price determined by a bookbuild that has been underwritten at a floor price of NZ67 cents per share.

 

Commenting upon the equity raising, a2M managing director and chief executive Geoffrey Babidge said that the funds are expected to “raise the company's capital markets profile and enhance opportunities for investor participation whilst maintaining a conservative capital structure".