SYDNEY, Oct 21 AAP - Cereal and snacks maker Freedom Foods is tapping investors for $65 million to help it buy its smaller rival Popina and build a new processing plant.
News of the capital raising came as Freedom reaped $28 million from selling down its stake in New Zealand's a2 Milk, reducing its holding to just over 10 per cent from 19 per cent.
The fresh funds will help Freedom buy Victorian-based cereal and snacks maker Popina in a $35 million deal that will allow it to expand its manufacturing operations.
Freedom also plans to build a new UHT processing facility in NSW, saying its existing non dairy UHT capabilities are constrained and restricting growth and financial returns.
Meanwhile, Freedom has sold 42.5 million shares in a2 Milk at 73 NZ cents each in an on-market trade carried out just three months after the NZ milk company rejected its takeover offer.
"The net proceeds will be invested into income producing assets consistent with Freedom Foods' growth strategy," the company said.
Freedom retains a holding of 75.2 million shares and intends to maintain a strategic stake in a2.
Shares in a2 Milk fell 4.5 cents to 68.5 cents, while Freedom's shares were in a trading halt.
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