Taking advantage of the strong increase in share price over the past few months, existing shareholders in China Modern Dairy, China’s largest producer of raw milk, have raised $110 million through the sale of a 5.2% stake in the company. Orders were placed for three times the amount of shares available reflecting the positive atmosphere in the Chinese dairy sector. In May of this year China Mengnui Dairy, China’s largest producer of milk products bought 26.9% stake in China Modern Dairy making its total holding in China Modern Dairy 28%. Now, trading volumes of China Modern Dairy are routinely $18 million to $19 million per day when a few months ago trading volumes were $3 million to $4 million per day. In September China Modern Dairy also entered into a joint venture with a company owned by KKR China Growth Fund and CDH to breed, raise, and sell dairy cattle; produce, process and sell raw milk, and to sell fertilizers. Over the next 18 months the partners will invest $140 million into the venture of which China Modern Dairy will own 12%.
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