Biotech entrepreneur A2 Corp plans to buy back former Australian subsidiary A2 Australia and undertake a $4 million share issue.

The purchase, from F&N Dairy Investments, is part of a strategy to consolidate Australasian operations.

F&N, a subsidiary of Singapore-listed consumer goods giant Fraser & Neave, bought A2 Australia in December 2004 for about A$1.1 million ($1.2 million). The deal gave F&N the right to export A2 milk into Asia - an issue that was still under discussion despite the Australia buyback.

A2 chief executive Andrew Clarke said the purchase would require further capital raising to fund the expansion of its Australian distribution network.

A2 expected to make a $4 million non-discounted equity issue at present share price levels later this year.

The issue would be underwritten by A2's majority shareholder.

- NZPA