Beleaguered baby formula maker turns to US, Beijing for rescue
Bubs Australia says it will turn a profit in two years, pinning its hopes on Washington DC and Beijing permitting its Melbourne factory to directly supply those markets.
The current board admitted its new sales strategy in China would not be “easy” given trade tensions, but insisted it was worth pursuing after conceeding the firm’s value had been “destroyed” since it hit the ASX in 2017.
Pallets of Bubs baby formula sit ready for loading onto a cargo plane at Melbourne Airport last month. Getty Images
Bubs director Reg Weine unveiled the manufacture’s strategic review on Thursday, which criticised the way sales into China were handled by the company's ousted founder and former chief executive Kristy Carr and former executive chairman Dennis Lin.
“Seven capital raises since the initial public offering in 2017, $240 million in accumulated losses, and our long-suffering shareholders are all underwater on their investment,” Mr Weine told investors. “Significant destruction of shareholder value is ultimately why we are here, why an intervention was necessary, and why the strategy execution and governance of Bubs had to change.”
The goat milk formula manufacturer, led by chairman Katrina Rathie, is facing a vote to spill the board – led Ms Carr and Mr Lin – this month. The present board and its former executives are also mired in a legal dispute relating to events that led to the latters’ dismissal.
Mr Weine, who oversaw the review, said Bubs would become profitable by the first quarter of the 2025 financial year via a five-step plan.
Still, 2.2 per cent was carved off Melbourne-based Bubs’ share price to 22¢ on Thursday. The stock was trading above the $1 mark during the onset of the COVID-19 pandemic in 2020.
Mr Weine said
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