South African dairy processor Clover Ltd has said it hopes to use the funds from its IPO for expansion and debt repayment.

The firm confirmed yesterday (17 November) its intention to float its ordinary and preference shares on the Johannesburg Stock Exchange.

The listing will be implemented together with a capital raising by the company, it said, through the private placement of new ordinary shares in Clover with selected eligible investors.

According to Reuters, the firm is hoping to raise up to ZAR500m (US$71.2m) with the listing.

The net proceeds, Clover said, will be used to fund the company's capital projects, primarily Project Cielo Blu - a capital project undertaken by Clover to redress inefficiencies in the supply chain - to repay debt and to fund potential acquisitions.

Clover CE Johann Vorster said: "The listing will be a major milestone for Clover. As a public company, our corporate and consumer brands will be aligned. This will contribute positively to the growth of our business as well as strengthen our position in the markets where we choose to operate."

Following the launch of the offering, Clover said it intends to suspend trading in the ordinary and preference shares on the over the counter market in order to facilitate the migration of trade to the main board of the JSE and the offering of ordinary shares.