The Bubs Australia Ltd (ASX: BUB) share price fell today by 4.65% at the time of writing to 82 cents. This came as the company's share purchase plan opened to retail shareholders.
What are the terms of the share purchase plan?
The company advised that eligible shareholders would be able to apply to buy up to $30,000 of new fully paid ordinary shares at a price of 80 cents per share.
To participate, eligible shareholders need to have been holding Bubs shares on 2 September 2020 at 7pm Sydney time, with a registered address in Australia or New Zealand. Additionally, those who participated in the company's previous share purchase plan in December 2019 could only apply for $30,000 less the amount that they subscribed for under the previous share purchase plan. The share purchase plan may be scaled back if retail shareholders apply for more than $11.7 million of shares or at the company's discretion.
The share purchase plan closes on 23 September 2020 at 5pm Sydney time.
Earlier this month, Bubs Australia raised $28.3 million through a placement to institutional and sophisticated investors at a price of 80 cents per share.
The funds raised by the company will be used to improve balance sheet flexibility, grow the company's capital, acquire an ownership interest in an infant formula manufacturing facility in China and to expand into new markets with 'in market' manufacturing where possible.
About the Bubs Australia share price
Bubs Australia is a producer of infant formula and nutritional products in Australia. Its products are supplied to Australia, China and various other countries in Asia and the Middle East. It has been listed on the ASX since 2017.
In the year to 30 June 2020, Bubs Australia's revenue increased 32% to $62 million. Infant formula sales increased 58% to $30 million. The company posted a statutory loss after tax of $8 million in the 2020 financial year compared to a loss of $36 million in the 2019 financial year.
In July, Bubs Australia entered a memorandum of understanding to produce infant formula in China with the use of Australian goat milk.
Also in July, the company announced that it had appointed celebrity Jennifer Hawkins as its global brand ambassador.
The Bubs Australia share price is up 107.5% since its 52-week low of 40 cents. However, it has fallen 14.43% since the beginning of the year. The Bubs Australia share price has fallen 29.66% since this time last year.
