Bega wants to be "a great Australian food company"

Bega wants to be "a great Australian food company"

Bega Cheese has announced an institutional placement and share purchase plan to raise equity to enable the company to achieve its vision of becoming a "great Australian food company".

The group said the capital raising will improve its financial flexibility and enable it to take advantage of future growth opportunities in the dairy sector, said the company.

The institutional placement will offer nearly 23 million shares at AUD5.35 a share, a 10% discount on Bega Cheese's closing price yesterday (22 June). The placement accounts for around 15% of Bega Cheese's capital and is expected to raise AUD125m (US$94.6m). It will be followed by a public offer, which is expected to boost the company's coffers by a further AUD37.5m. Each eligible Bega Cheese shareholder will have the opportunity to apply for up to AUD15,000 of new shares, priced at AUD5.25.

"Bega Cheese has today moved to strengthen its balance sheet through an approximately A$160m capital raising," executive chairman Barry Irvin said. "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."

Bega Cheese, meanwhile, confirmed its forecast for normalized EBITDA for the 2017 financial year will be approximately AUD67.4m, slightly higher than the previous year's AUD66m.

The company operates six dairy manufacturing plants across New South Wales and Victoria, manufacturing and around 238,000 tonnes of dairy products every year.

Bega Cheese is best known for manufacturing business-to-business and consumer-branded dairy products but, earlier this year, it snapped up Mondelez International's Australian and New Zealand grocery and cheese businesses, including Vegemite, for AUD460m (US$348.2m). The deal is expected to be finalised on 30 June.