A2 Milk wants funds for expansion

A2 Milk wants funds for expansion

A2 Milk Co., the New Zealand-listed dairy firm, is hoping to raise up to NZ$40m through a share offer to fund expansion at home and abroad.

The company, which has carved a foothold in Australia and is building businesses in China, the UK and the US, has also increased its debtor finance facility from A$3m to A$10m and is negotiating a further bank guarantee facility of NZ$10m.

"The new capital raised will be applied primarily to fund increasing working capital associated with the significant growth in infant formula in ANZ and China," A2 Milk said in a statement.

A2 Milk said the performance of its "ANZ and China and other Asia businesses" had been "ahead of budget" during the first two months of its new financial year.

"Infant formula is emerging as a more significant and meaningful growth driver for the company than expected, with a current focus on sales in ANZ and in China," the company added.

"The UK and USA businesses, combined with Corporate, performed consistent with earnings expectations for the first two months of FY16."

Click here for our interview two weeks ago with Scott Wotherspoon, CEO of A2 Milk's businesses in China and the UK when he discussed the company's performance in and plans for both markets.