The owners of fruit processing business SPC are continuing to develop a debt for equity swap in an organic dairy business, despite supply problems created by the collapse of an organic milk supplier.
Shepparton Partners Collective, which bought the SPC Ardmona business from Coca Cola Amatil, has invested $20 million to help build a Geelong dairy factory.
SPC announced on May 1 that it had reached agreement with Wattle Health, an organic food producer, to invest in the construction of a spray dryer.
In return for the investment, SPC will be issued 30 million fully paid ordinary shares in Wattle Health.
The 50-50 joint venture involves SPC supporting the business in product development, marketing, sales and distribution.
In May, SPC chairman Hussein Rifai said his company was working with Wattle Health to see it develop the global market for Australian organic infant formula products.
SPC said it was wanting to develop its portfolio of health food products.
On May 22, Wattle Health announced it had been told that the supply company, Organic Dairy Farms of Australia, had been placed into voluntary administration on May 15.
The company, which produces True Organic Butter, was one of Australia's largest organic dairy company and owned by Victorian and Tasmanian farmers.
The directors placed the company into voluntary administration, blaming a downturn in the Chinese market, delayed sales and the impact of COVID-19.
The Geelong factory was supposed to be completed by June, but the collapse of Organic Dairy Farms has delayed construction.
Wattle Health said on July 31 the construction had been temporarily put on hold as Wattle and SPC continued to formalise the joint venture.