The Freedom Foods Group Ltd (ASX: FNP) share price has returned from its trading halt and pushed higher this morning.
At the time of writing the diversified food company's shares are up over 1.5% to $4.88.
Why was the Freedom Foods share price in a trading halt?
Freedom Foods requested a trading halt last week whilst it undertook a $130 million equity raising via an institutional and retail entitlement offer.
These funds will be used to accelerate Freedom Foods' growth strategy. This includes $100 million towards the acceleration of capital expenditure programs in nutritional ingredients through 2019 and 2020 and $30 million to support increased working capital requirements to meet demand growth.
This morning the company revealed that it has successfully completed the institutional component of the equity raising. The institutional portion raised approximately $119.3 million, at an offer price of $4.80 per new fully paid ordinary share issued.
According to the company's managing director and CEO, Rory Macleod, the placement was significantly oversubscribed.
He said: "The Placement was significantly oversubscribed with strong demand from a broad range of high quality institutional investors. The Institutional Entitlement Offer was also well supported by existing institutional shareholders with a take-up of approximately 92%. We appreciate this continued external endorsement of Freedom Foods's ongoing performance and strategy."
The remaining $11.2 million will now be raised via the retail component of the entitlement offer. This will open on Wednesday May 29 and is expected to close on Tuesday June 11. These funds will also be raised a $4.80 per new fully paid ordinary share issued.
What now?
Freedom Foods was a strong performer in the first half of FY 2019, growing sales by 31% to $209 million and operating net profit by 27.6% to $6.4 million.
Judging by the strong demand for this placement, institutional investors appear to believe the company is well-positioned to continue this strong form in the second half and beyond.
Elsewhere in the industry, the A2 Milk Company Ltd (ASX: A2M) share price has edged lower and the Bellamy's Australia Ltd (ASX: BAL) share price has creeped ever so slightly higher this morning.
