Cooks Food hands brands, expansion strategy to CHAMP-backed firm

Instead it sold existing brands and the buying rights to the Goodman assets to Hutchinsons, part of the Australian food distribution group that trades as Manassen Foods and was capitalized with help from CHAMP Private Equity.

Chairman and majority owner Keith Jackson was trying to build the same sort of diversified food group in New Zealand, aiming for a 10-fold increase in sales to NZ$50 million within three years. Eight or nine Cooks head office workers are losing their jobs though food processing was contract packed and the brands are the main assets changing hands.

"There will not be a requirement for a corporate office going forward,” Jackson said.

Cooks Food Group only listed on Oct. 20. Its sale of existing assets for $4 million is below the shares’ market cap on the NZAX market of $5.5 million, based on their last traded price on Jan. 26 of 25 cents.

The company had already embarked on a capital raising at 24 cents a share when it returned to shareholders to say the opportunity to acquire the DYC and Diamond brands meant it needed more funds. It offered 40 million shares at 15 cents apiece to raise $6 million. Under its funding plan it would acquire the assets with $6-8 million of debt and the same value of ordinary and convertible preference shares.

Jackson said the discount had been required in view of the deterioration in market conditions. The company will retain its NZAX listing after incurring. He declined to comment on whether the capital raising missed its target in the current tough conditions.

In an announcement yesterday, the company said it had sold 265,827 shares at 24 cents apiece plus an additional 132,914 shares at no cost to bring the overall price per share down to 16 cents.

Cooks Food will retain its NZAX listing and Jackson said the cash-up company hoped to be embark on new businesses in the next 12 months.

“The ambitions and vision remains the same,” he said.

Businesswire.co.nz

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