Bubs Australia Ltd (ASX: BUB) announced today the successful completion of an oversubscribed share placement, raising $40 million at $0.75 per share.
The infant formula and goat dairy products supplier is pushing to expand into China through strategic partnerships with local operators in that market including Chinese e-commerce giant Alibaba.
Proceeds from the share placement will be used to increase working capital, marketing, product development, capital expenditure to enhance the company's push towards vertical integration and KPI payments to vendors who meet their targets.
The placement will result in the issue of 53,500,000 new shares in Bubs Australia and will dilute existing shareholders.
The Bubs share price was down 6% following the announcement to $0.84.
Bubs shareholders will be hoping the China move will boost the company's share price as it has for A2 Milk Company Ltd (ASX: A2M) and Bellamy's Australia Ltd (ASX: BAL).
