Wide Open Agriculture raises $22m to fund plant-based manufacturing and expansion plans
Regenerative farming and food producer Wide Open Agriculture (ASX: WOA) has emerged from a trading halt today with news it will raise about $22 million to fund its plant-based manufacturing and expansion strategy.
The company has received binding commitments from institutional and sophisticated investors that will subscribe for 26.7 million shares at $0.75 each to raise $20 million.
Existing shareholders will be given the option to participate in a share purchase plan that will raise up to $2 million.
The share purchase plan issue price will also be $0.75, which represents an 11.8% discount to the company’s closing price of $0.85 on 24 November.
“Over the last seven years, we have positioned Wide Open to grow rapidly alongside global consumer demands for healthy, nutritious food and drinks that regenerate the planet,” Wide Open managing director Dr Ben Cole said.
“In the last 12 months, we have a established the company as a leader in regenerative food and farming in Australia.”
“As we increase our plant-based offerings, we know this segment is well aligned with our regenerative purpose and represents one of the fastest growing and most attractive markets in the food industry.”
Dr Cole added the company would use the raising proceeds to “rapidly advance its oat milk and functional protein business lines” while also growing the company’s Dirty Clean Food brand in Australia and South East Asia.
Plant-based manufacturing facility
Proceeds will be used to design, build and operate a commercial scale plant-based manufacturing facility in Australia that will initially focus on producing Wide Open’s flagship oat milk OatUP, which is sold under the Dirty Clean Food Brand.
It will be the first oat milk manufacturing plant in Western Australia, which will also generate the lowest carbon emissions per litre of oat milk in the world.
The company anticipates the facility will improve its operational efficiencies and provide it with the flexibility to rapidly develop plant-based milk products in response to customer trends.
This will be done while providing transparency and traceability of its regeneratively grown WA oats and “made in Australia” branding.
In addition to scaling up its oat milk offerings, Wide Open will also use funds to advance the scope and capability of its pilot-scale lupin protein processing plant.
The modified lupin protein will be included in Wide Open’s high protein oat milk. Samples will also be produced to supply food and ingredient companies to facilitate progression from research and development through to commercialisation.
Wide Open has already identified the site for the lupin protein facility and secured the first tranche of equipment.
The facility will also be used to build new intellectual property and know-how for trade secrets and patent applications.
Wide Open will allocate some raising funds towards boosting its marketing strategy and existing distribution agreements including the recent ones to sell OatUP in Singapore and throughout Australian supermarket giant Woolworths’ stores.
GrowHub will purchase a minimum of $500,000-worth of OatUP and distribute it throughout Singapore in the first 12 month.
Meanwhile, the Woolworths deal has an estimated value of more than $750,000 per annum with first sales anticipated at the beginning of March next year.
Using raising proceeds, the company will develop and implement a marketing strategy to support online sales and retail campaigns for its oat milk and new products in Australia and South East Asia.