Infant formula maker Care surprised by false float documents

Care Corporation, the owner of infant formula brand Care A2 Plus, says a document purporting to be a prospectus for its ASX listing is ‘not genuine’.

Care A2 Plus is one of the few overseas brands that have been approved to import into the US, where there is an infant formula shortage. Picture: Getty Images

Care Corporation, the owner of infant formula brand Care A2 Plus, says a document purporting to be a prospectus for its ASX listing seeking to raise up to $49.5m from investors is “not genuine”.

The 60-page document – which suggests the company is valued at up to $544.5m – has been promoted on social media and was available on the website of Sydney trading and investment firm Point Capital.

However, Care says it has no association with Point Capital and does not know how it obtained the document.

Morgans, which is listed in the document as the company’s financial adviser, confirmed it was working with Care on a potential listing but declined to comment on the document’s provenance.

Care is yet to lodge a prospectus with the Australian Securities & Investments Commission.

It is understood the document is a draft used to complete a $5m placement ahead of a potential listing, with the company engaging Wilson Street Capital, which in turn engaged Point Capital.

The draft document was not related to the potential public ­offering, despite being labelled a prospectus and purportedly containing the IPO’s details, including how many shares would be issued, the offer’s timeline and the directors’ fees upon listing.

Care A2 Plus entered the spotlight after it became one of the few infant formula brands to gain temporary import approval from the US Food and Drug Administration to help ease America’s chronic baby food shortage.

The company – founded in 2019 – has developed a product for the US market. It expected to make its first shipment in October after previously slating August as its initial delivery date.

It has also secured the naming rights for the Kooyong Classic tennis event from 2023 in a five-year deal.

The document purporting to be its prospectus states that Care aims to raise between $24.75m and $49.5m through a public offering priced at 75c a share. The document states if it reached the maximum subscription, it would value the company at $544.5m.

The document states that Care lost $5.32m off revenue of $365,918 in the year to June 30 and had total assets of $5.27m. The company has not made public any financial figures and those disclosed in the document cannot be substantiated. The document also outlines a range of new products for production in the future including a pre-natal pregnancy nutrition formula, pre-mixed read-to-use formula and vitamin milk.

Care’s A2+ infant formula.

A timeline for ASX listing was included in the draft document, with ASIC lodgement and the offer’s opening slated for October 18 – the same day Point Capital promoted the IPO on social media. The offer was expected to close on October 28, with trading to begin within three weeks, according to the document.

However, the document has yet to be lodged with ASIC.

New Zealand’s National Business Review reported on Friday that Point Capital director Orngday Mongjaay had been allocated $5m to sell to retail investors. When asked about the document, Mr Mongjaay told The Australian: “Point Capital received information from the company. There has been some miscommunication in respect to the timing of the release and our team are working to rectify this ASAP.”

Wilson Street Capital has also advertised the private raising and noted it was a pre-IPO offering. “A fantastic 50 per cent pre-IPO discount is available now. This is the last chance to get involved prior to listing,” the firm said. “The product uses only the best ingredients which can be traced from the farm to the tin and it is sure to attract significant interest from local and international markets and is due to list late in 2021.

“It is already retailing across the Chemist Warehouse pharmacies and a deal has just been done with Woolworths as well as discussions with the other major ­supermarkets and pharmacies are well on the way too.”

The document included a message purporting to be from Care chairman Walter Bugno – who ran Lion in the early 2000s before switching to biscuits running Campbell Arnott’s Asia-Pacific operations and overseeing Tabcorp’s casinos division, which later became Star Entertainment.

The draft document quotes Mr Bugno saying the company was focused on “pioneering the next generation of infant and toddler formula that is nutritionally most like human breast milk than any other product globally”.

“Care … was built on a clear strategy to distribute its product ranges across Asia including China, Korea, Japan, Vietnam, Philippines, Malaysia and Indonesia, tapping into Australia’s strong reputation for quality dairy products,” Mr Bugno is quoted saying in the document.

“You may have read about the critical shortage of infant and toddler formula in the United States as a result of a major disruption to the local supply chain. The US government embarked on a global search for potential supply partners to assist with these shortages. Care was one of the organisations selected and, not only that, Care was also allocated the highest allocation of supply.”

The document lists former NSW Liberal leader Kerry Chikarovski as deputy chair and Kerry Hyland as executive chair – both are named on the company’s ASIC filings. Ms Chikarovski declined to respond to inquiries.