BioVittoria becomes latest IPO darling to falter as fund raising misses target

Wednesday 30th December 2009

BioVittoria, the company seeking to commercialise a sweetener extracted from a Chinese fruit, has become the latest IPO hopeful to falter after its fund raising fell well short of its $20 million target.

The company’s initial public offering, which was being managed by brokerage McDouall Stuart, didn’t meet the minimum required subscription level of $8 million.

The failed IPO comes after milk processor Synlait pulled the plug on its sale and DNZ Property Fund delayed its IPO until next year, dealing a triple blow to the NZX Ltd. in terms of new listings.

“This is disappointing but it’s certainly not the end of things,” said Garth Smith, a Guangxi, China-based director of the company. “Obviously there was a question of timing, with the end of the year – and lots of other factors.”

BioVittoria had wanted the funds to buy fruit to ramp up production in anticipation of Food & Drug Administration approval in the U.S., which is hoped for next month, Smith said.

“We have a big outlay to buy fruit every year,” he said. The company wants to commercialise a zero-calorie sweetener called PureLo, which is extracted from luo han fruit grown in China’s Guanxi province.

It claims the white powder produced is 200 times sweeter than sugar and sells for about US$450 a kilogram.

BioVittoria is now likely to tap private investors for more of its funding needs.

It boasts directors including chairman Robert Stringer of U.S. venture capital firm Sherbrooke Capital, Stuart McKenzie of New Zealand’s Endeavour Capital and Bridget Liddell, wife of General Motors' newly named CFO Chris Liddell, from New York-based Fahrenheit Capital.

The company’s advisory board includes former Coca-Cola Co. R&D executive Danny Strickland and former PepsiCo Inc. executive Christopher Sinclair.

Chief executive David Thorrold didn’t immediately return calls, nor did Andrew McDouall, managing director of McDouall Stuart, which was managing the IPO.

While previous statements relating to the IPO were supplied to the NZX, none was posted notifying its failure, and BusinessWire was unable to obtain an original copy of the release yesterday from the company or McDouall Stuart.

According to BioVittoria’s prospectus, the company was in breach of its debt-to-equity covenant in the year ended March 31 and continues to be in relation to its loan facility with ANZ National Bank.

“If the bank decided to withdraw its ongoing support then the group may not be able to continue to operate as it would not be able to pay creditors as they fall due,” the notes to the prospectus say.

“Further, if the company does not raise the necessary new capital to meet its working capital needs it may not be able to secure a continuation of existing lending facilities for both the parent and the subsidiary.”

Businesswire.co.nz

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