Australian supplements company Blackmores is planning to raise up to $117 million to strengthen its balance sheet and support growth initiatives in Asia.
The company will secure $92 million through an institutional placement and $25 million through a share purchase plan.
Blackmores CEO Alistair Symington said the equity raise will strengthen the company’s balance sheet and liquidity position and provide the flexibility to pursue key strategic priorities.
“It will enable us to accelerate our growth initiatives in Asia and invest in our efficiency program which will help us to achieve our objective of returning Blackmores to sustainable, profitable growth,” he said in a statement to the ASX.
The company namesake and major shareholder Marcus Blackmore said he would not be taking part in the equity raise.
“Unfortunately I am unable to participate in the equity raising at this time, however Blackmores has been an integral part of my family since 1932 and needless to say I am absolutely committed to being a long term shareholder.
Blackmore praised Symington for his “outstanding leadership” and said he was more confident about Blackmores future than he has been for the last two years.
“This almost entirely new team will place the Company in an excellent position to capitalise on the significant growth opportunities that face the Company as we witness the taking of supplements becoming mainstream in the community,” he said.
The company reported that the COVID-19 outbreak is driving a material increase in demand for Blackmores’ immunity products. But because these products make up just a small part of the portfolio, the benefits are offset by a lag in non-immunity products partly driven by lower shopping traffic.
In February, Blackmores reported a 46 per cent drop in first half profit, and flagged further trouble from the coronavirus.
Packaging costs coupled with regulatory change in China over the period resulted in net profit of $18.2 million.