Chinese based manufacturer of consumer condiment products and animal feeds China Food Company (AIM: CFC) is planning to raise £6.5 million through a three-year convertible loan to secure funds for further growth, while saying that trading remained in line with expectations, buoyed by recent growth in the Chinese economy.
The company has so far secured and will issue £2.6 million of convertible loan notes to institutional and existing shareholders. China Food has also said it was in advanced discussions with two financial institutions with respect to additional bank facilities of at least RMB 100 million, of which RMB 60 million will be a term loan and the rest will be available for working capital purposes.
The remaining convertible notes will be issued to the extent that China Food needs additional working capital prior to securing additional bank facilities.
“These additional funds place China Food in a very strong position to continue to grow the business and further increase market share. China Food remains cash generative and is well invested with its new soya sauce manufacturing capacity scheduled to come on line in the first half of next year. We must remain mindful of the changing global market conditions but we are increasingly optimistic about the future,” said Chairman of China Food John McLean.
Shares in the company rose 5% in London on the news.