Ann: Placement - AHF Secures Cornerstone Investor, page-13

No name attribution given to today's announcement. No tag for further comments. Not even a welcoming statement given out or made by the Chairman. A very, very unusual announcement by all descriptions where all the comments were attributed to Morrell and none to the Company or its BOD /CEO.

To who, then, can the following statement be attributed as it appears that no-one from AHF's end is owning up to the statement:
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"The primary purpose of this substantial placement to a single investor is to significantly strengthen the Group’s position in prospective negotiations regarding acquisition of or participation in synergistic value adding businesses."

As for the following statement, this is of some concern (particularly the highlighted bits):
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"Mr Morrell has been in discussions with the directors and has inspected the Group’s assets and reviewed in detail the recently published Strategic Overview prior to making a decision to invest. He has also expressed preliminary interest in participation in the proposed joint venture projects being pursued by AHF in the construction and operation of UHT and Specialty Milk Powder facilities, each of which were set out in the Strategic Overview."

Very little was indeed said of any of this in the Strategic Overview. The most that was said of this was the following:
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(p5)
Completed preliminary reviews on range and scope opportunities including UHT Milk and Specialty Powders (ranging from organic milk powders through to organic infant formula base) . Now conducting detailed due diligence and discussions with several established key relationships with potential JV partners and continuing confidential developments.
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(p9, in reference to 5 years time)
Processing capabilities to efficiently handle small to medium production runs of segregated inputs (e.g. Jersey, Free Range, Organic etc.) of all production outputs (e.g. milk, cheese, butter, yoghurt, whey, specialty milk powders and infant formula base etc.).
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(p9, again)
Beginning to End Processing capabilities in: • Fresh milk; • UHT and Extended shelf life milk; • Specialty Powder drying – dry and wet blends;
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(p12)
AHF, subject to final feasibilities. Milk assessments and appropriate funding, is aiming to establish the Lead Roles/Facilities including for:
• UHT – long life milk production for domestic and export markets.
• Extended Shelf Life facilities for domestic and export markets for fresh specialty milk.
• Wet-blend milk powder drying for Specialty Milk particularly for organic milk and ingredients aimed at the Organic Infant Formula markets.
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(p14)
With attractive returns to be obtained from assets such as flexible Specialty Powder dryers and UHT facilities and exports, the Board plans to use the capital released from Farm Assets to enter these specialised processing areas.
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(p14 - China)
There is nothing to preclude CDC reapplying for a CNCA licence for milk or other milk products including milk powders and when the facilities and products are available, the Board will very likely proceed down that path.
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(p15)
AHF is in continued development of several Joint Venture (JV) opportunities which are well advanced and prospective, however incomplete at the time of this document. They are primarily new segments and feasibilities on;
• UHT
• Extended shelf life milk
• Specialty powders including organic whole and skim powder and organic infant formula.
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(p19 - Opportunities)
AHF’s strategy is combine the milk processing, ingredient addition, wet-blending, powder drying and tinning in aseptic containers on one integrated site to contain these risks in important products such as infant formula.

So, in reference to the following Morrell comment from out of today's announcement, one must query from just exactly where in the Strategic Overview was this information actually contained, released or advised to the market?:
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"..... in the proposed joint venture projects being pursued by AHF in the construction and operation of UHT and Specialty Milk Powder facilities, each of which were set out in the Strategic Overview".

Really, about the only reference to this (as obscure as what it was) occurred on p19 (Opportunities).

To what extent then has Michael, in his rush to bring on board a "cornerstone investor" (related or associated, or not), has caution been thrown to the wind and the shareholders not been fully informed or apprised of what's going on. The July strategic overview was all motherhood in nature, with nothing specific set out there yet today's announcement suggests that the Overview was comprehensive and detailed in what it disclosed, advised or set out.

So, quite apart from the motherhood statements that were made at the time, what is it that the shareholders have not yet been told about (yet which was alluded to in today's statement) and what then of the continuous disclosure requirements and AHF's compliance with them (including according to the stripped down Corporate Governance disclosures of late last week)?

This raises far more questions than any of those which today's announcement and placement might otherwise have been tempted to answer.