Fonterra Remains Cagey on Plans to Sell Stake in China Formula Maker Beingmate
Xu Wei
/SOURCE : Yicai
Fonterra Remains Cagey on Plans to Sell Stake in China Formula Maker Beingmate

(Yicai Global) Nov. 16 -- Fonterra Cooperative Group has denied reports that the New Zealand dairy giant will sell off its stake in Beingmate Baby & Child Food, adding that no concrete decision has been made regarding the Chinese company.

Fonterra is undergoing a review of its investments, major assets and partnerships to improve performance, including its investment in Beingmate, the Auckland-based firm told state-backed The Paper.

Radio New Zealand reported earlier this week that the company had decided to divest three assets including Beingmate, citing the firm's Board-Chairman John Monaghan.

Beingmate, based in Hangzhou in eastern China's Zhejiang province, specializes in developing and selling baby and child formula and food and offers related consulting services, as well as wholesale prepackaged food and dairy products.

Fonterra posted a net loss for this fiscal year of NZD196 million (USD133.4 million) as well as a NZD439 million loss from its investment in Beingmate.

Fonterra Brands Hong Kong issued a partial tender offer to Beingmate's shareholders to buy 205 million shares for CNY18 (USD2.64) per share in February 2015 to become Beingmate's second-largest shareholder with an 18.8 percent stake.

After three years, the cooperation has taken nosedived due to huge losses in business and a large drop in Beingmate share prices last year that sparked reports of disagreements between Fonterra and Beingmate, Beijing News reported in January.

Beingmate's net losses widened by 35 percent to CNY106 million (USD15.6 million) last year and the firm could also face delisting.

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Keywords: Fonterra , New Zealand , Beingmate