AS the world’s biggest milk processor, New Zealand-based Fonterra Cooperative, seeks $NZ500 million in equity, one of its Australian suppliers is running a similar process.Tasmania-based Van Diemenâ€™s Land Company, or VDL, is in final discussions with three parties to raise up to $110m of equity and another $70m of debt to expand its milk production, the groupâ€™s chief executive Michael Guerin told Deal Journal Australia.
The final structure of the deal and number of parties chosen is yet to be determined, Mr Guerin said, adding Auckland-based Antipodes Capital is advising VDL.
VDL is 98.5 per cent owned by New Zealand-based New Plymouth District Council, and Mr Guerin said it has not yet been agreed whether the capital raising will dilute New Plymouth.
â€œAny deal will be in the best interest of the company and existing shareholders so a placement or a sell-down from New Plymouth is still being considered,â€ Mr Guerin said, adding that funds would be used to convert existing sheep and cattle-focused farmland into dairy land.
In the year to May 31, VDL produced 5.76 million kilograms of milk solids from around 18,000 cows, a 12.9 per cent rise from the year earlier. It is targeting fiscal 2013 production of 6.7 million kilograms, representing growth of 16.3 per cent.
Its 24 dairy farms supply Fonterra.
The company was founded in London in 1824 by individuals associated with the English wool, trade and textile industry. A year later, they received a parchment from King George IV which granted them 350,000 hectares of a colony which was later named Tasmania.
The company still operates under the Royal Charter which means it has a court of directors and a governor, rather than a board of directors and a chairman.
In the nineteenth century, Europeans referred to Tasmania as Van Diemenâ€™s Land because Dutch East Indies Governor-General Anthony van Diemen was presiding when his mandated explorer Abel Tasman became the first European to land in Tasmania.
Source: The Australian