Beston Global Food Company Limited (ASX:BFC) announced an agreement with Aurora Diaries for the sale of Beston’s dairy farms in Mount Gambier to Aurora for $40.4 million in cash. The highlights from the transaction are as follows:
- Transaction secures 100% of milk supply from dairy farms for 10 years, with an option of extension
- Sale proceeds to reduce debt (to around 10% gearing) and fund Mozzarella and Lactoferrin production expansion
- Transaction likely to conclude by 30 September 2020
- Continues the transition to a higher margin cash generating dairy business
The transaction accomplishes BFC’s strategic objectives of issuing capital for re-investment in higher returning dairy factory assets, whilst securing long term milk supply from the farms.