The Freedom Foods Group Ltd (ASX: FNP) share price is locked in a trading halt this morning after the diversified gluten- and allergy-free food company revealed plans to raise $130 million, via a pro-rata non-renounceable entitlement offer of 1 new share for every 18 held at $4.80 per share.
Retail and institutional investors will be invited to contribute $65 million each into the capital raising, which is priced at a 5.5% discount to the volume weighted average price over the past 20 days. The raising is fully underwritten by Veritas and UBS AG.
Freedom's management team reported that $100 million of the funds raised will be used to accelerate investment in "nutritional ingredients" through 2019 and 2020, with the remaining $30 million to support increased working capital requirements as the business grows.
The group also reported it continues to see strong demand in Australia, China and SE Asia for its allergy-free dairy products, cereals, snacks and plant-based beverages that can be commonly found on the supermarket shelves of Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).
