Australian Dairy Nutritionals has announced an equity raising via a pro-rata non-renounceable entitlement offer to raise approximately $3,468,835. Under the structure, eligible shareholders can subscribe for 1 new share for every 6 existing shares held at the record date, priced at $0.028 per share. The record date is set for 30 January 2026 at 7:00pm AEDT, with up to 123,886,970 new shares potentially issued.
The capital raising provides existing shareholders first opportunity to participate in funding growth initiatives before external investors are approached. Funds raised will be used to improve processing efficiency, to fund the execution of the company’s growth plans in China, and for general working capital purposes. New shares issued under the entitlement offer will rank equally with existing ordinary shares.
How entitlement offers work and why companies use them
A non-renounceable entitlement offer allows existing shareholders to purchase additional shares in proportion to their current holdings. The “non-renounceable” designation means these entitlements cannot be traded on the ASX or transferred to other parties. Shareholders who choose not to exercise their entitlements receive no compensation for unused rights, resulting in ownership dilution without offsetting value.
(ASX: AHF) has included a top-up facility within the offer structure. Eligible shareholders who take up their full entitlement can apply for additional shares from the pool not subscribed by other participants. However, there is no guarantee applicants will receive all or any additional shares they request under this facility, as allocation remains subject to demand and board discretion.
Offer pricing relative to market
The $0.028 offer price has been positioned relative to recent trading activity and volume-weighted averages:
- 3.7% premium to last traded price of $0.027 on 21 January 2026
- 1.4% discount to 15-day VWAP of $0.028391
- 9% discount to 30-day VWAP of $0.030777
The premium to last traded price signals the board’s confidence in valuation, while the modest discount to longer-term averages provides incentive for shareholder participation.
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Where the $3.47 million will be deployed
The use of funds breakdown indicates a growth-focused capital allocation, with the majority directed toward working capital to support expansion initiatives in China, a key market for the company’s Ocean Road Dairies Organic A2 infant formula products.
| Use of Funds | Amount (A$m) |
|---|---|
| Capital equipment and other capex costs | $0.6m |
| Working capital for growth plans and general working capital | $2.8m |
| Costs of the offer | $0.05m |
The $0.6 million allocated to capital equipment represents investment in processing efficiency improvements at the company’s Camperdown, Victoria manufacturing facility. This capital expenditure is positioned to enhance operational capability as production scales to meet demand in target markets. The $2.8 million working capital allocation provides financial capacity to execute growth strategies in China, where organic A2 infant formula products continue to demonstrate market opportunity.
Executive Chairman commentary
“On behalf of the Board of Directors, we are pleased to undertake this capital raise as the Company looks to accelerate growth plans in 2026. The Board considered that it was important to provide an opportunity to existing shareholders first, before external capital from other investors are considered,” said Peter Nathan, Executive Chairman.
The shareholder-first approach to capital raising demonstrates governance alignment with existing investor interests, prioritising participation rights before seeking external funding sources.
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Key dates and how to participate
Eligible shareholders include those with registered addresses in Australia, New Zealand, Hong Kong and China as at the record date. The Offer Booklet, containing personalised entitlement and acceptance forms, will be dispatched to eligible participants and available for download from the company’s dedicated offer portal.
- Record Date: 30 January 2026 (7:00pm AEDT)
- Offer Booklet despatch/Offer opens: 4 February 2026
- Last day to extend closing date: 13 February 2026
- Offer closes: 18 February 2026 (5:00pm AEDT)
- New shares quoted on deferred basis: 19 February 2026
- Results announcement: 25 February 2026
- Allotment of new shares: 25 February 2026
- New shares commence trading: 26 February 2026
The board retains discretion to allocate any shortfall shares not taken up under the entitlement offer within three months of the closing date, subject to compliance with the Corporations Act and ASX Listing Rules. Based on the board’s assessment of potential demand, management has indicated reasonable confidence in placing a substantial portion of any shortfall that may arise.
About Australian Dairy Nutritionals
Australian Dairy Nutritionals operates a vertically integrated dairy business model encompassing organic and organic A2 protein dairy farms alongside processing infrastructure. The company produces the Ocean Road Dairies Organic A2 protein infant formula range, marketed as Australia’s first organic A2 protein infant formula manufactured using fresh Australian milk from company-owned organic farms.
Manufacturing operations are based in Camperdown, Victoria, with farm holdings located in southwestern Victoria’s dairy region, often referred to as the “Golden Triangle” of Australia’s dairy industry. This vertical integration model provides supply chain control from farm gate through to finished formula products, supporting quality assurance and traceability claims relevant to premium infant nutrition markets. The China market represents a strategic focus for the organic A2 infant formula category, where consumer demand for Australian-sourced dairy nutrition products has demonstrated sustained growth trajectories.
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