Comvita Wins Reprieve from New Shareholders

Comvita Ltd has attracted two new cornerstone shareholders — Fraser and Neave Ltd, a Singaporean food and beverage enterprise, and PHC Investments Ltd, an Auckland-based company whose holdings focus on the aged care sector. If Comvita’s current effort to raise up to NZD30m in new equity succeeds, Fraser and Neave (F&N) will own about 20.0% of the company. PHC Investments has already disclosed a holding of 13.1%.

By Bruce Roscoe

Although an amount of NZD30m will stall foreclosure by its two main banks, Comvita will remain a heavily indebted company, and the reprieve may represent more a stay of execution without uninterrupted profit growth or asset sales – or both. Asset sales seem the more likely scenario, given the roller-coaster profit performance over the past 25 years.  

Under the Comvita capital raise plan announced 15 April, shareholders will receive rights to purchase 1 new share per 1.53 shares owned for NZD0.65 per share. The price represents a discount of 7.1%-29.3% to the NZD0.70-0.92 fair value calculated by Comvita adviser Grant Samuel in September 2025 for the unsuccessful Florenz takeover bid.

A full take-up of the rights would create 46.1m new shares (calculated by dividing existing shares of 70.6m by 1.53). The number of shares in issue therefore would increase to 116.7m. At NZD0.65 per new share, about NZD30m would be raised. But Comvita expects a take-up of only about half. That‘s where Fraser and Neave (or rather its wholly owned subsidiary F&N Ventures Pte Ltd) comes in.

F&N has committed to purchase the shares that Comvita shareholders do not. Which means that Comvita shareholders and F&N would each outlay about NZD15.0m and each acquire 23m new shares, if Comvita’s 50.0% take-up bears out. But there’s a catch. F&N has limited its investment to 19.99% of total Comvita shares in issue after the rights offer. (A holding above 20.0% would trigger the need for shareholder approval under the New Zealand Takeovers Code.)

Provisional FOB export statistics for retail pack monofloral manuka honey show continued volume weakness for China and volume strength for the US on price declines for both markets. 

In a presentation released to NZX, Comvita has outlined three other take-up scenarios. Under a 36% take-up, NZD25m would be raised (F&N’s outlay: NZD14m); at 80.0%, NZD44m would be raised (F&N’s outlay: NZD6m). In this scenario, the higher take-up would mean that remaining available shares would not take F&N’s holding to 19.99%. To avert such an outcome, Comvita has worked into the offer a top-up provision that allows the placement of additional shares to F&N for NZD0.80c per share. The fourth scenario for a take-up of 100% is theoretical.  

In its 15 April announcement to the Singapore Stock Exchange, F&N cautioned: “There is no certainty or assurance that the proposed transaction will be completed”. Comvita has reserved the right to cancel the offer at any time. A raise of less than NZD25m likely would trigger cancelation or require a renegotiation with banks over the amount committed to loan repayment. The result of the capital raise will be announced 12 May.  

The holdings of Comvita shareholders who do not participate in the raise dilute by 39.53%, though there is a market for the rights, which closed at a thin NZc1.1 on 1 May.

Comvita chair Bridget Coates, in her undated Dear Shareholder letter bundled with the 15 April offer document, wrote: “The capital raise and refinancing package mark a significant milestone for Comvita…”

Shareholders may ask, “What became of the capital raises that took in NZD25.1m, NZD22.9m, and NZD47.6m in the March 2015, June 2017, and June 2020 financial years?” Shareholders likely will see the latest appeal for funds as more millstone than milestone.

Embracing Debt

In its 15 April announcement to NZX, Comvita reveals that a new debt “facility” totalling NZD50m has been arranged – NZD20.0m in “working capital” and NZD30m in “core debt”.

In October 2025 Comvita advised that repayment of NZD59m in bank debt was due in Jan.-Mar. 2026. Extensions were granted to 30 April 2026 and again to 30 May 2026. The apparent reluctance to foreclose on Comvita may reflect the company’s two main banks’ view that repayment is more achievable by allowing the company to continue to trade and solicit funds from shareholders than to force asset sales.

Too, banks will value Comvita as a client. By virtue of the bounty bestowed by bees, Comvita has paid NZD90.3m – equivalent to 60.7% of NZD148.7m in operating profits – in interest expense and related finance charges to banks between December 2002-June 2025. (Comvita public disclosure begins with the prospectus issued 6 August 2002.)

The Guard Changes

While Comvita has welcomed new shareholders, once loyal shareholders have left the building. Chief among them is Li Wang, who with husband and former Comvita director Zhu Guangping, spearheaded Comvita’s advance into China, which became Comvita’s largest market. Ms Wang’s 12.1% holding in Comvita as at 1 August 2025 made her the largest shareholder. Also, China Resources Enterprise Ltd, the second-largest shareholder as of that date, has sold its 6.1% holding.

On the home front, Kauri NZ Investments Ltd, which wholly owns Oravida Ltd, a supplier of New Zealand foods to China, has increased its Comvita holding to 11.3% from 5.0%. (All above shareholding changes followed the April announcement of the rights offer.)

Mānuka Milkshakes?

F&N breaks down its September 2025 year revenues of SD2,323m into the segments of dairies (SD1,276m; 55%); beverages  (SD772m; 33%); publishing and printing (SD197m; 9%); and other (SD78m; 3%). After tax profit was SD210m and net asset value was SD2,772m. (1 Singapore dollar equals about 1.3 NZ dollars.) The company employs 7,200 staff in 12 countries, according to its website.

Excepting Singapore, New Zealand honey has made only marginal headway in Southeast Asia. In CY2025 for all honey types, Singapore ranked 8th-largest market (342.0 tonnes); Malaysia, 13th (84.7t); Indonesia, 16th (58.4t); and Thailand, 25^th (9.3t). Vietnam does not admit imports of New Zealand honey. The region may represent a promising greenfield for F&N and Comvita if they are able to collaborate.

At 19.99%, F&N’s investment in Comvita is a toe dip, and the company has stated it does not expect the transaction to impact earnings or asset values in the September 2026 year. Comvita underperformance could prompt a full takeover offer, which would represent a footbath for a company of F&N’s scale.

Bruce Roscoe is a Japan-resident researcher and former foreign correspondent and securities analyst.