Beingmate Baby & Child in trading halt pending asset sale
Chinese infant formula maker Beingmate Baby & Child Food had its shares halted on the Shenzhen stock exchange ahead of an asset sale to a related party in the next week and a half.
The infant formula maker, which counts New Zealand's Fonterra Cooperative Group as a cornerstone shareholder, sought the trading halt yesterday. It expects to make an announcement in the next 10 days, according to a translation of a Chinese-language notice to the stock exchange.
Beingmate slashed its annual earnings guidance this year, prompting Fonterra to reassure stakeholders that the long-term outlook for its Chinese partner remained strong and the company was an important part of its strategy in the world's most-populous nation.
Fonterra bought an 18.8 percent stake in Beingmate in March 2015, paying 18 yuan per share. That price has fallen to 11.97 yuan before yesterday's suspension.
Fonterra's China strategy involves $1.6 billion of total capital investment in farms in China and the Beingmate partnership. Chairman John Wilson said last November that was important to remember the investment in Beingmate is just one component of the partnership.
There has been a 78% uplift in sales of Fonterra's Anmum infant formula brand, a latecomer to the Chinese market, through Beingmate's distribution network while production is starting to flow into Beingmate's consumer businesses from its joint venture Darnum plant in Australia following a lengthy delay in getting regulatory approvals, he said.