Bega launches capital raising

23 Jun, 2017 11:32 AM
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It has been a significant year for Bega Cheese
Bega Cheese has today moved to strengthen its balance sheet ...
It has been a significant year for Bega Cheese

Bega Cheese has launched a $160 million capital raising plan.

The company plans to raise about $122.5 million via an institutional placement and $37.5 million via a share purchard plan to all existing eligible Australian and New Zealand shareholders.

It said the proceeds from the capital raising "will be used to improve Bega Cheese’s financial flexibility to take advantage of future growth opportunities in dairy and food".

Bega Cheese’s executive chairman, Barry Irvin, said: “Bega Cheese has today moved to strengthen its balance sheet through an approximately A$160 million capital raising.

"It has been a significant year for Bega Cheese with the announcement of the company changing acquisition of the Mondelez Grocery Business including Vegemite, peanut butter, salad dressings and cheese for A$460 million.

"This was followed by a transaction with Mead Johnson, which included the sale of a spray dryer and an infant formula finishing plant for A$200 million with a 10-year access and service agreement which secures revenue and income streams from these plants."

Mr Irvin said the capital raising gives Bega "the financial strength and flexibility to grow our dairy and food businesses as part of our vision to be a great Australian food company.”

Bega Cheese also confirmed its current estimate of FY17 normalised EBITDA (unaudited) is about A$67.4 million.

The key details of the Institutional Placement are:

• An offer of approximately 22.9 million new fully paid ordinary shares, representing approximately 15% of Bega Cheese’s issued capital at an issue price of A$5.35 per share. The issue price represents a 10.1% discount to Bega Cheese’s closing price of A$5.95 on Thursday.

• Offer to be made to institutional and professional investors in Australia and certain overseas jurisdictions; and

• The Institutional Placement is not underwritten.

New Bega Cheese shares issued under the Institutional Placement will rank equally with existing Bega Cheese shares and are expected to be issued on Friday, June 30, and to

start trading on ASX on Friday, July 7.

Bega Cheese is advised by Kidder Williams Limited. Bell Potter Securities Ltd is Lead Manager to the Placement together with Co-managers PAC Partners Pty Ltd, Baillieu Holst Ltd and

Select Equities Pty Ltd.

Under the share purchase plan, each eligible Bega Cheese shareholder at 7pm on June 22 will have an opportunity to subscribe for up to A$15,000 of new Bega Cheese shares, subject to scale back, without incurring brokerage or transaction costs.

Eligible Bega Cheese shareholders are holders of full-paid ordinary shares in Bega Cheese and whose address on the share register is in Australia or New Zealand (provided that such shareholder is not in the United States or acting for the account or benefit of a person in the United States).

The issue price of the new Bega Cheese shares under the SPP will be A$5.25.

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