New Zealand Manuka honey maker Comvita has revealed plans to raise NZD50m (US$30.9m) to “improve balance sheet flexibility and build resilience”, two months after putting such plans on the back burner.
The company said in a statement to the Australian Securities Exchange (ASX), on which it is listed, that it plans to raise equity through a NZD20m placement to institutional investors at an offer price of NZD2.50 per share, together with an approximately NZD30m entitlement offer.
On 23 March Comvita said it was postponing capital-raising plans as demand for its products had improved during the Covid-19 crisis as consumers sought out foods perceived to be healthier.
And in its new statement to the ASX, chairman Brett Hewlett revealed this trend is continuing. “Comvita has continued to benefit from strong demand for its products as consumers are actively choosing natural products that strengthen immunity,” he said.
“In addition, this year’s Manuka honey harvest has been very strong in terms of both volume and quality, setting us up nicely to meet that strong demand in larger key target markets of China and North America.”
He said the business continues to make good progress on its cost out and business transformation programme.
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Explaining the need to raise money, he said: “The board believes that now the market conditions have stabilised, it is prudent to undertake the equity raising as foreshadowed earlier in the year to reset the capital structure, build greater resilience in our balance sheet and enable the business, under new the CEO, David Banfield, to focus on profitable growth.”