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IPO deepens New Zealand's economic ties with China

Monday - 6/24/2013, 12:01am  ET

WELLINGTON, New Zealand (AP) -- New Zealand's economic ties with China are deepening with plans for the first IPO of a Chinese company on the New Zealand stock market.

Dairy company Synlait Milk announced Monday it plans a July listing in order to raise capital to expand its infant formula business. Synlait is majority owned by Chinese company Bright Dairy & Food Co.

Bright doesn't plan to sell any shares, although the Initial Public Offering would dilute its shareholding to about 40 percent. A governance agreement would allow Bright to retain effective control of Synlait by appointing four of eight directors.

Other listed New Zealand companies have been bought by Chinese companies, but Synlait's listing would mark the first such IPO.

The listing is expected to raise about 120 million New Zealand dollars ($93 million).

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