CATCH THE BUZZ – Australian Honey Packer Raising Capital, Expanding

Alan Harman

Australian honey producer Capilano Honey Ltd. Announces a A$16.8-million ($12.1-million) capital raising offer on the Australian Stock Exchange, saying the money will be used to fund expansion.

The offer is a one for 10 rights issue at a price of A$19.50 ($14.02) a share.

The price is a 7.7% discount on the A$21.12 ($15.18) share price when Capilano requested a trading halt.

Any new shares not acquired by eligible shareholders will be treated as shortfall shares and can be applied for by other eligible shareholders.

Chairman Trevor Morgan says in a letter to shareholders that the proceeds will be used to fund the company’s acquisition of beekeeping enterprises; strengthen the balance sheet by reducing debt; increase the company’s working capital to support business growth and new export market sales; invest in select production efficiency upgrades and new product capabilities; and allow the introduction of a dedicated marketing budget supporting new product developments and export market growth.

Capilano, the market leader for honey in Australia and one of the world’s largest honey packers, was established in 1953.

The company has A$182-million ($130.9-million) market capitalization and sources honey from more than 300 bee keepers across Australia.

Exports represent 20% to 30% of its business and it trades with some 32 countries.   Finance General manger Dirk Kemp tells The Land weekly agricultural newspaper that Capilano has to move to its next stage to help it to grow.

“Part of this is the joint venture we announced with (New Zealand honey producer) Comvita Ltd. and that is the focus on developing and growing the supply of premium honey products, such as Manuka honey,” Kemp says.

“We need to develop our export market obviously, in China, but also the rest of the world, including North America,” Kemp says.