BioVittoria stock offer comes up short

Dr Garth Smith, second right, co-founder of the Hamilton company BioVittoria, and some of his team of orchard workers. Photo supplied

Hamilton-based natural sweetener company BioVittoria's bid to float on the stock exchange and raise $20 million has fallen short.

The company announced today it had closed its $20m initial public offering (IPO) undersubscribed as it had not met the minimum subscription level of $8m.

"We are obviously disappointed that there was insufficient investor support to reach the minimum subscription," managing director David Thorrold said.

"We believe the lack of support is a reflection of a very difficult equity market with this the third IPO deferred or cancelled in the last month."

BioVittoria's business model, a fully integrated global value chain, was relatively complex and the New Zealand market's appetite for such an investment was limited by a lack of precedence, Mr Thorrold said.

The company would now try to raise new capital through a private round early in the new year, and was in discussions with a number of potential private investors in Europe, Asia, the US, and New Zealand, he said.

It was likely that the majority of the new funding would come from overseas.

BioVittoria wants to raise $20m to commercialise a sweetener extracted from a Chinese fruit crop.

The non-caloric fruit concentrate sweetener called PureLo is made from Chinese-grown luo han fruit and the company expects to process 3000 tonnes of fruit from Miao and Yao hill tribe growers in mountainous areas of Guangxi province, southern China.

The company says the resulting white powder is the first naturally-occurring sweetener to be approved by the US Food and Drug Administration. It is 200 times sweeter than cane sugar and sells for about $450/kg, mostly to beverage, food and confectionary manufacturers.

"We are on track for our March 2010 forecast and expect to receive US FDA regulatory approval by the end of February. We believe this will be a significant factor in what we expect to be a successful private round," Mr Thorrold said

- NZPA