Infant formula supplier Wattle Health Australia will raise up to $12.4 million to fund a recent acquisition and joint venture.
Wattle Health, which listed on the Australian share market in March, says it has received commitments from institutional and sophisticated investors to take up a new placement of shares.
Some of the proceeds will be used to fund Wattle Health's previously announced acquisition of an interest in Australian infant formula maker Blend & Pack and a joint-venture with Organic Dairy Farmers of Australia.
The share placement was significantly oversubscribed, with the total bids received in excess of $20 million.
Wattle Health shares rose following the announcement and were seven cents, or 12.07 per cent, higher at 65 cents at 1128 AEST.
Wattle Health executive chairman Lazarus Karasavvidis says the take-up of the share placement represents a vote of confidence in Wattle Health's direction.
"This is an exciting time for Wattle Health Australia, and we look forward to achieving our aim of being the nutritional dairy company of choice," Mr Karasavvidis said on Thursday.
Wattle Health announced in July that it would acquire a five per cent stake in Blend & Pack for $5 million.
Blend & Pack is one of eight infant formula manufacturing plants in Australia licensed by Chinese authorities to produce infant formula for China's market.
Wattle Health and fresh milk supplier and processor Organic Dairy Farmers are considering a joint venture for the production of dried organic powdered milk.
The new share placement will proceed in two parts.
The first tranche will involve the issue of up to 16.3 million shares at 56 cents each, to raise a maximum of $9.1 million.
The second tranche, which is subject to shareholder approval, will involve the issue of up to six million shares to raise $3.3 million.
On top of the new share placement, Mason Resources Finance, which is the majority shareholder in Blend & Pack, will exercise an option to subscribe for $500,000 in Wattle Health shares.
Mason, through Brilliant River Ltd, is already a significant major shareholder in Wattle Health.
