China’s agri-company buys 25% stake in Ausnutria Dairy Corp. for US$250m

ASIA – CITIC Agri Fund Management Co Ltd, the private equity arm of CITIC Securities Company Limited has acquired a 25.18% stake in an investment holding firm, Ausnutria Dairy Corp. for US$250million to become the company’s largest shareholder.

In a filing to the stock exchange reported by Reuters, Ausnutria said that CITIC Group Corp Ltd, will buy 249 million new shares from the company.

In addition, CITIC will buy 130 million existing shares from Taiwanese liquid medicine firm Center Laboratories Inc for US$85.79m, which will cut the latter’s stake from 40.28% to 24.98% at the completion of the sale.

However, the number of shares held by the chairman of the company’s main operating team, Yan Weibin, and its chief executive, Bart van der Meer, remains unchanged, and the pair’s interests in the company will remain at 7.11% and 10.80%, respectively, after the deal.

According to Ausnutria Dairy, its shares rose as much as 6.1 percent to US$0.88, the highest since November 2009, before trimming gains while the broader market was up around 1.4%.

“The Subscription Shares represents 19.82% of the total number of issued Shares as at the date of this announcement, and 16.54% of the total number of issued Shares as enlarged by the issue and allotment of the Subscription Shares,” said a statement from Ausnutria Dairy Corporation.

“The gross proceeds of the Subscription will be US$164m.

The net proceeds of the Subscription, after deduction of the related expenses, will be US$164m, representing a net price of US$0.66 per Subscription Share.”

The proceeds from the new share sale would be used to repay bank loans and for future investments.

CITIC Group businesses include information services, motor vehicles, food and logistics, publishing, infrastructure, environmental services, modern agriculture, general aviation, among others.

The company, jointly established by CITIC Agriculture, Longping High-Tech and two other listed agricultural companies operates large state-owned enterprises, and focuses on investment in agricultural biotechnology and branded consumer products.

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