China Food seeks £6.5m
Article Date: Nov 04 2009Chinese consumer condiment and animal feed concern China Food Company intends to raise £6.5 million in convertible loan notes for expansion.
Based in China’s Shandong province, the AIM-quoted company, which expects its delayed but recently completed Soya sauce facility to start trial production next year, says the three-year notes will carry a 10 per cent annual coupon and be convertible into its shares at 32p, which happens to be their current price. Advised by FinnCap, China Food wants the money to fund the new facility’s production and has already sold £2.6 million of the notes to institutions and existing holders, including Main World Investments, in which chief operating officer Feng Bo has interests, as well as other directors.
China Food, whose first-half profits fell 65 per cent to £1.2 million, says it is now trading to plan, ‘bolstered by the improving Chinese economy, which grew 8.9 per cent in the third quarter of 2009’, helped by the impact of Beijing’s reflationary measures. Chairman John McLean says the money raised will 'place China Food in a very strong position and further increase market share’, adding ‘China Food remains cash generative and is well invested’ and declaring ‘we are increasingly optimistic about the future’.
Shares in London-headquartered China Food have swung between 46p and 24.5p over the past 12 months and now trade at 32p. They should fare better than some other China counters.
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