Comvita is selling a minority stake to Singapore-based Fraser & Neave (F&N) as part of a fund-raising exercise.
The New Zealand-headquartered Mānuka honey maker said it plans to raise as much as NZ$30m ($17.7m) from the share offer, which will be contingent on then securing a refinancing package with other lenders.
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In a stock exchange filing today (15 April), Comvita said F&N, via its unit F&N Ventures, has committed to participate in the offer for up to NZ$15m.
At that level, it would hold 19.99% of Comvita.
The deal would expand F&N’s existing portfolio in soft drinks, dairy and food products in South East Asia.
F&N CEO Rahul Colaco said in the filing: “Our participation in Comvita reflects F&N’s continued focus on strengthening our portfolio in higher growth, premium consumer segments.
“We also see opportunities over time to explore areas of collaboration across our key markets in Asia, where F&N has established capabilities and local market understanding.”
Bridget Coates, Comvita’s chair, said F&N’s addition is a “significant and deliberate” part of this offer.
The alliance with F&N could present opportunities in “channel and market expansion, digital, data analytics, new product innovation, R&D, sustainability and efficiencies across operations, supply chain and technology”, Coates said.
Comvita CEO Karl Gradon outlined how having F&N on board will support its growth in target markets in ASEAN.
The announcement follows earlier speculation in the market about F&N’s interest in Comvita. Its lenders had previously backed a recapitalisation after Florenz’s takeover attempt fell through in December.
Comvita said the equity raise will take place through a pro-rata renounceable rights offer priced at NZ$0.65 per share for eligible shareholders.
The offer is due to open on 23 April and close on 7 May.
Comvita has the option to undertake a share placement to F&N at NZ$0.80 a share, which could increase total proceeds to as much as NZ$44m.
Once the transaction is completed, Comvita intends to add a director nominated by F&N to its board.
In the same filing, the company said it had secured a conditional refinancing agreement with its banking syndicate.
That arrangement depends on Comvita completing the capital raise.
