As­set sale im­mi­nent for Fon­terra part­ner

The Southland Times - - WEATHER -

Fon­terra’s fi­nan­cially trou­bled Chi­nese in­vest­ment part­ner Be­ing­mate has seen its share price tum­ble 10 per cent amid news it will make an im­mi­nent an­nounce­ment about an as­set sale.

Share trad­ing has been sus­pended un­til de­tails of the as­set sale are re­vealed in the next few days.

In 2015 Fon­terra signed off on a deal to in­vest $700 mil­lion for an 18.8 per cent stake in the com­pany, which it said would give ac­cess to the lu­cra­tive Chi­nese mar­ket for its in­fant for­mula and other prod­ucts.

Fon­terra con­firmed that Be­ing­mate In­fant & Child Ltd had in­di­cated its in­ten­tion to sell ma­jor as­sets to its con­trol­ling share­holder, Be­ing­mate Group Co. Ltd.

‘‘In keep­ing with list­ing reg­u­la­tions, while the de­tails of the trans­ac­tion are be­ing [formed/ fi­nalised], Be­ing­mate I&C Co. Ltd have ap­plied to the Shen­zhen Stock Ex­change for a sus­pen­sion of share trad­ing. This also safe­guards ex­ist­ing in­vestor in­ter­ests, in the event of any re­lated share price fluc­tu­a­tions,’’ Fon­terra said in a state­ment.

Be­ing­mate has been be­set by fi­nan­cial prob­lems, re­port­ing a loss of $158m last year, com­pared with a profit of $20m in 2015. Late last year its rep­u­ta­tion was hit by a case of al­leged milk pow­der tam­per­ing, caus­ing it to fore­cast a loss of up to $48 mil­lion for the first quar­ter of this fi­nan­cial year.

An au­tho­rised Be­ing­mate in­fant for­mula dealer had been linked to a ring that bought cheaper pow­der and repack­aged it so it ap­peared to be a more ex­pen­sive prod­uct.

Adding to its woes, a num­ber of se­nior em­ploy­ees have de­parted the com­pany in the last six months, in­clud­ing a director, vi­cepres­i­dent and chief fi­nan­cial of­fi­cer Shen Li­jun.

First NZ Cap­i­tal head of de­riv­a­tives Mike McIn­tyre con­firmed the pos­si­bil­ity of an as­set sale, with an an­nounce­ment to be made soon.

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