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Bellamy's shares suspended for a week

AAP logoAAP 13/12/2016 Petrina Berry

Troubled baby formula maker Bellamy's has sought to suspend trading in its shares for a week as the company, already in a trading halt, continues work on a trading update

More than $500 million was wiped from Bellamy's market value on December 2 after it revealed Chinese regulatory changes had dented its sales and profit was expected to not match the 2016 financial year.

Bellamy's went into a trading halt on Monday and was due to release another trading update by Wednesday but instead has surprised the market by asking for a suspension of its securities.

The Australian Securities Exchange has granted Bellamy's request to suspend trading until December 21 as the Tasmanian company finalises another trading update.

In a letter to the Australian Securities Exchange on Wednesday morning, Bellamy's says a voluntary suspension is necessary for it to manage its continuous disclosure obligations as it finalises an update on the impact of trading conditions on its expected financial results.

Bellamy's December 2 trading update said regulatory changes, which included restrictions on the number of baby products companies are allowed to sell in China, had triggered discounting by rivals that dented its sales.

The company said if conditions did not improve, its full-year profit could come in below 2015/16's $244.6 million.

That update unnerved investors and triggered a sharp sell-off that wiped more than $500 million from Bellamy's market value which led to the ASX raising questions over the timing of the announcement.

Bellamy's has insisted it has complied with the rules.

It said the board considered its sales on November 22 but it wasn't until a board meeting on December 2 that the company finalised the updated forecasts and approved it to be released to the ASX that day.

Bellamy's shares last traded at $6.68.

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