Cooks Food shareholders back plans to build war chest
Cooks Global Foods [NZX:CGF] shareholders today backed plans to build a war chest for China's Jiajiayue Group (JJY) and chairman Keith Jackson to inject funds into the business by buying shares, before seeking further equity capital from the public.
All resolutions at today's special meeting in Auckland were passed, meaning Chinese supermarket chain operator JJY and a Jackson-led investment vehicle will each invest $4.5 million into Cooks, and allow a further capital raising of up to $9 million, the company said in a statement. The offer is expected to be launched next year, and will give existing shareholders a priority to invest. JJY's investment was contingent on the Chinese company getting Overseas Investment Office approval to buy a farm in North Waikato, and Cooks said it has verbal confirmation of that sign-off.
The funds raised will underpin a five-year plan for Cooks to grow existing and new international markets. Cooks is the owner of the master franchise rights for Esquires Coffee Houses outside of New Zealand and Australia, with agreements in Canada, the UK and Ireland, the Middle East, China and Indonesia.
"Having franchisees and strategic partners as shareholders strongly aligns their interests with the broader Cooks Global Foods shareholder base," Mr Jackson said. "Their investment is also ensuring we can realise our vision of being the world's largest organic and fairtrade coffee retailer."
The deal means Cooks' majority owners, Stuart Deeks and his brother Lewis, sell to JJY and Jackson's investment, ending their involvement in the company they built up from 2002.
The NZAX-listed shares last traded at 12c, and have declined 11% this year. Cooks plans to migrate to the NXT market, and is on the hunt for two new independent directors.