Wednesday November 18, 08:27 AM
UPDATE 1-PureCircle raises 40 mln stg to support stevia demand
* Places 20 mln shares at 2 pounds each
* Placement at 3.6 pct discount to Tuesday's closing price
* To use proceeds for expansion, marketing initiatives
* To build new facility in Paraguay
(Adds details)
Nov 18 (Reuters) - Malaysia-based sweetener group PureCircle Ltd said it raised 40 million pounds ($67.18 million), through a share placing, to boost production of its natural sweetener made from stevia leaves.
The company, which supplies sweeteners to U.S. beverage giants PepsiCo Inc and Coca-Cola Co, said it placed 20 million shares at 2 pounds each, a 3.6 percent discount to the stock's Tuesday's closing price.
PureCircle (LSE: PURE.L - news) said it expects a rising demand for stevia as its customers have come under increasing pressure to reduce calories in food and beverages. It expects clients to launch more stevia-sweetened products and further line extensions in 2010 and 2011.
The company said it would use the proceeds for expansion of its supply chain, working capital and marketing initiatives.
PureCircle said it plans to increase the expansion of its production capacity with a new stevia extraction facility in Paraguay, South America, which will start in early 2011.
Stevia is a shrub native to Paraguay, and compounds from its leaves like Rebaudioside A (Reb A) is likely to compete with established artificial sweeteners such as saccharin, aspartame and sucralose, which are sold under brand names Sweet'N Low, NutraSweet and Splenda.
Shares of PureCircle closed at 207.5 pence on Tuesday on the London Stock Exchange (LSE: LSE.L - news) .
($1=.5954 Pound)
(Reporting by Shivani Singh in Bangalore; Editing by Aradhana Aravindan) Keywords: PURECIRCLE/
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