Institutional investors thirsty for kava
Special Report: Fiji Kava has investors singing its praises as it moves closer to becoming the first kava company to list on any global exchange.
The initial public offer is due to open next Monday, with an anticipated listing date in mid-November, but the company (ASX: FIJ) has already secured some significant indicative investments from Australian and Fijian cornerstone investors.
Fiji Kava is looking to raise AUD $5.2m from investors at 20 cents per share before listing with an indicative market capitalisation of $13.7 million and a number of key investors tell Stockhead they’re already on board.
Some experts have suggested that kava could become the new cannabis, having been recognised as a natural alternative to treat anxiety, insomnia, stress and muscle tension.
It’s a sentiment echoed by Andrew Chapman, Managing Director of Merchant Funds, who recognises the investment potential of Fiji Kava for inclusion in their Merchant Opportunities Fund.
“We see the opportunity for kava to provide a much needed alternative to the widespread use of benzos – currently a USD$15B market.”
“Plus, with the growth of the medical marijuana industry, we can see an opportunity to ride the wave on this movement as well.”
Other investors are buoyed by the potential opportunities that could arise from future research into the use of specific kava strains, formally known as cultivars.
John Sampson, Manager of the Strategic Global Fund, is interested in Fiji Kava’s clinical trials and the developments they are making working with individual kava strains.
“We like the science behind this company. We see the potential for the audience reach to dramatically increase once the company had identified the particular chemotype and kavalactone profiles that can be used to treat people’s individual needs.
“Dedicated kava products will be produced that best treat anxiety, stress, insomnia, or muscle relaxation.”
“We think there is a big opportunity for growth in this area, especially with the company focused on providing a fully tracked and traced product pipeline to their consumers,” said Jeremy Bond, Founder and CIO at Terra Capital.
Professor Erik Larson, chairman of the Kinetic Growth Fund, was an early backer of Fiji Kava. It will be substantially increasing its investment in the company through the IPO.
“We are pleased to see Fiji Kava pass another critical milestone in its development. We were impressed to see it become the first Kava producer in Fiji to get an exemption from foreign ownership restrictions. We have no doubt this reflected the quality of its leadership team, operations and strategy.”
Additional institutional investors have already expressed their interest in investing in the Fiji Kava IPO and the Company is confident in reaching its investment target once the offer is open.
Leading the raise is PAC Partners (Ian Leete), supported by Cicero Advisory and Kontiki Capital.
The prospectus can be viewed on the company’s website: www.fijikava.com
Fiji Kava is a Stockhead advertiser.