The Bellamy's Australia Ltd (ASX: BAL) share price has fallen heavily after returning to trade at long last.
In early trade the infant formula company's shares are down almost 13% to $5.88.
Why are its shares lower?
Bellamy's shares were voluntarily suspended just under two weeks ago after it emerged that its newly-acquired canner Camperdown Powder had its CNCA license suspended.
In order to acquire Camperdown Powder, Bellamy's successfully undertook a $60.4 million entitlement offer.
Investors that took up the 5 for 38 pro rata accelerated non-renounceable entitlement offer have been promised their money back should they want it, with the shortfall shares to be taken up by an underwriter.
Whilst the Camperdown suspension isn't necessarily the end of the world for Bellamy's, it certainly puts a question mark on its future exports into China in my opinion.
It also means that Bellamy's may have to look for an alternative canner to either acquire or form a third party canning agreement with.
As I mentioned last week, one canner the company was believed to have been casting its eye over was Australian infant formula and nutritional products manufacturer Blend & Pack Pty.
But last week fledgling infant formula company Wattle Health Australia Ltd (ASX: WHA) announced that it has entered into a conditional agreement to acquire an equity interest Blend & Pack along with Hong Kong-listed company Mason Financial Holdings.
Unfortunately CNCA licensed facilities are not plentiful, which could mean that Bellamy's is forced to pay over the odds to acquire one.
And considering the abject failure of its latest acquisition, I'm not sure how many investors would be willing to back the company up a second time.
Should you buy the dip?
Overall, although its shares have sunk significantly lower today, I would suggest investors resist the temptation to invest.
Instead, I feel the prudent things to do is wait to see how the situation develops over the next few months.
In the meantime, I think investors wanting exposure to infant formula would be better off looking at rival a2 Milk Company Ltd (Australia) (ASX: A2M).
