News

Freedom Foods accelerates funding for Shepparton plant

By Dairy News

Shepparton’s Freedom Foods plant is set to benefit from the company’s decision to accelerate the raising of capital.

The $200 million that is set to be raised through the introduction of extra shares available to existing and new shareholders will partly go toward the development of a specialised nutritionals platform at Shepparton, which will be aligned to the dairy UHT operations.

The platform will allow for protein standardisation and the ability to separate milk into industrial grade pure protein components for use in the company’s branded products and for sale to key strategic customers.

“We’re looking at accelerating investment on sites, in particular Shepparton,” Freedom Foods chief executive officer Rory Macleod said.

“Shepparton will see a $60 million investment in the next 12 to 18 months. This is one of our prime areas of focus.

“We are looking at increasing capital to give us flexibility … for opportunities that come in and to have a strong balance sheet capability over the next year or two,” he said.

The deal will give existing shareholders the option to buy a further three shares for every 29 they own, and a further 20.8 million shares for new and existing shareholders will be available — both at a reduced price of $4.80 per share.

This is not the first time the company has attempted to raise capital in such a way.

“We’ve done a couple of raisings in the last two to five years. We raised $75 million for an acquisition 18 months ago but this is the largest ever; $200 million is quite a big chunk of money,” Mr Macleod said.

All new shares are set be issued by April 15.

The other focus the company has is in Ingleburn, NSW, where a new plant and dairy beverage capabilities facility has been completed.

In more good news, Freedom Foods has agreed to long-term partnerships with milk producers across Victoria and NSW.

“Our base product is milk, and consumers want to know where food comes from more and more, particularly in China and South-east Asia.”