Media release
WAIMATE – Oceania Dairy Limited today announced the terms of its $74.75 million capital raising to finance the establishment of a dairy processing facility near Waimate, South Canterbury.
Oceania Dairy is offering 23 million shares for subscription, representing 88.46% of the company.
Ten million of the new shares are available to financial investors at $3.25 per share during the offer period.
Thirteen million shares are available to Waimate district farmers at either $3.25 per share during the offer period or $4.25 per share through a deferred payment arrangement.
“Oceania Dairy’s objective is to maximise earnings for investors and provide farmers with an opportunity to participate in the entire value chain, from the growing of grass on farm to the sale of milk powders in international markets through a share of the processing business,” Oceania Dairy chairman Keith Turner says.
All investors must subscribe to a minimum of 160,000 shares, representing a minimum investment of $520,000, and are required to make an initial payment of 30 cents per share at the time of application.
Financial investors need to pay the balance of $2.95 per share within 14 days of the offer close.
Farmer investors can either pay the $2.95 balance within 14 days of the offer close or defer payment until July 2011 and pay a balance of $3.95. The deferred payment arrangement price represents a minimum investment of $680,000. Farmers wishing to subscribe on a deferred payment arrangement must meet the eligble persons criteria under New Zealand’s securities law.
Allotments to financial investors will be made on a first-come first-served basis.
Allotments to farmer investors will be based on the length of supply agreement that they have entered into with Oceania Dairy and the time at which they wish to pay for their shares. Those with longer supply agreements and payment within the initial offer period have first priority.
“Although initial allotment of shares to farmers will be based on supply to the processing facility, the agreements will be independent of each other,” Turner says.
“Oceania Dairy will initially be majority owned by the farmers for the farmers.
“However, once the initial allotment of shares has been made, there will be no link between investment and supply.
“This approach will provide Oceania Dairy with a stable capital base for business and avoid the issues currently faced by cooperatives,” he says.
The offer will close when the directors of Oceania Dairy decide to proceed with the development of the processing facility after resolving they are satisfied:
- with any conditions attached by either Waimate District Council or Environment Canterbury to the issue of the resource consents;
- that sufficient milk supply agreements have been signed with farmers;
- that adequate equity and debt has been raised to complete the development of the processing facility and to provide adequate operational working capital, that being a minimum of $45 million.
The offer close is expected to be March 15, 2010.
The offer proceeds total $74.75 million if fully subscribed at a share price of $3.25 per share. This could increase to $87.75 million if all farmers opt for the deferred payment arrangement.
Investors wishing to secure a firm allocation of shares must confirm their interest in writing to the Oceania Dairy advisors, Ocean Partners Ltd, by 5pm on February 15, 2010.
More information
Visit: www.oceaniadairy.co.nz
Contact:
Keith Turner, chairman of Oceania Dairy Limited,
phone 021 423 016 or
Paul Park, acting chief executive of Oceania Dairy Limited,
phone 03 377 7003 or 021 838 766
Media contact: Janine Ogier, Convergence Communications & Marketing,
phone 0277 534 360
