Along with the current dividend, the Company offered securityholders the opportunity to increase their holdings via a Dividend Reinvestment Plant ("DRP"). Despite limited time to apply, the Board is delighted with the number of Australian securityholders participating. In total, over 200 securityholders holding over 9.6 million CDIs elected to participate in the DRP.
The DRP offer price will be A$0.1207, representing a 5% discount to the volume weighted average price between the 20th and 31st of March 2017.
Due to the Company's strong balance sheet with over US$21.6 million in cash and cash equivalents at 31 December 2016, the Company has elected to conduct an on-market buyback of the CDIs to be provided to securityholders who elected to participate under the DRP. This will ensure that existing security holders are not diluted and the on-market buyback will be carried out over the coming weeks.
Whilst participation in this DRP is only available to local Australian and New Zealand residents, the Company will investigate offering the opportunity to participate in the Company's DRP for future dividends to overseas securityholders.
The Company is committed to focusing on capital management strategies that deliver value to its securityholders. The board & management team recognise recent market performance of the Company's securities and will use a combination of company strategy and capital resources to provide value to our securityholders. We will continue to update securityholders on capital management & company initiatives going forward.
About China Dairy Corp Ltd
China Dairy Corporation Limited (ASX:CDC) is a company primarily engaged in the production and wholesale of raw milk and the rearing, breeding and sale of dairy cows in Heilongjiang province, China.
CDC generates revenue through two primary business models:
- the sale of raw milk from cows that are owned by the company; and
- milk sale commissions on the sale of raw milk from cows the company has sold to farmers.
As at 31 March 2017, CDC owned 31,877 cows and partnered with farmers with an additional 20,927 cows from which CDC makes a sales commission on the milk sold.
China Dairy Corp Ltd