Saturday, March 30, 2024

Backdoor listing to get at capital

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Fledgling Waikato dairy company Happy Valley Milk getting a backdoor listing on the Australian Stock Exchange and raising capital to start building an A2 milk processing plant.
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Listed but suspended Longreach Oil has agreed to buy Happy Valley and issue shares to HVM shareholders, who would then own 77.8% of Longreach, the balance being held by existing Longreach shareholders.

When the ASX is satisfied with the transaction, Longreach/Happy Valley can then seek share capital to fund about half of the $230 million Otorohanga plant construction cost.

It is also expected Longreach will change its name and appoint a new chief executive nominated by HVM and three directors from the NZ dairy company.

For the NZ company the reverse takeover provides a lower-cost path to listing on the ASX, where it can access a bigger pool of potential investors.

The companies think the transaction will be completed in six months, that construction could start in early 2019 and take about 12 months, ready for the start of the 2020-21 dairy season.

Longreach said HVM had land use consents from the Otorohanga District Council to establish and operate a fully integrated milk processing, blending and packaging plant.

The transaction is conditional on obtaining Waikato Regional Council water use and water discharge consents, which it said were well advanced.

The consented design includes an integrated, high-speed blending and canning plant designed to produce premium milk powder for sale into China and elsewhere.

Happy Valley was incorporated two years ago and has two directors – Auckland-based venture capital adviser Randolph van der Burgh and Hong Kong-based David McCann.

It has 14 shareholders, mainly in NZ, Australia and Hong Kong, including project director Grant Horan of Hamilton.

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