SML - Synlait Milk Ltd

[Newman]

Bright Dairy invested $200m in total on Synlait. It A2milk would need to make Bright Dairy happy ($200m+ for its 39% shareholding?) to buyout Synlait. If so, A2milk would need at least $400m for the 80% of Synlait shares that it does not own. On top of that are a $130m loan payable immediately and $180m bonds. Altogether, A2milk needs to pay more than $700m.

[Balance]

"Keith Woodford says Synlait is in big trouble with losses mounting up and no easy answers."

https://www.interest.co.nz/rural-new...o-easy-answers

Boop boop de do
Marilyn

Good article exploring the options being considered (and negotiated behind the scene).

ATM : "Without Synlait, which holds the licence for manufacture of Chinese-labelled ‘a2 Platinum’, a2Milk is in big trouble. It would mean a2Milk would need to obtain an equivalent licence for its majority-owned Mataura Milk in Southland. Obtaining that licence could be a long process, and there is also a long herd-conversion process before Mataura will have the necessary volume of A2 milk."

Bright : "Bright cannot increase its shareholding unless it offers to purchase all shares. Would it be willing to buyout the company itself, or alternatively sell its shares in a buyout? Bright’s public response until now has been that it is happy with its current shareholding and intends to stay as a long-term shareholder. That could change either way. If Bright really wanted to, it could find funds to purchase 100 percent of Synlait. However, there is a big fly in the ointment, with that being a2Milk."

The only thing close to a certainty is that something big now has to happen. The Synlait of the future is going to be very different to the current Synlait.

[billkiapi]

Having said that, didn't I read that ATM working with Yashili now for EL product. Yashili is a big player with SAMR.

[Balance]

Having said that, didn't I read that ATM working with Yashili now for EL product. Yashili is a big player with SAMR.

Another Chinese owned company.

[whatsup]

Bright Dairy invested $200m in total on Synlait. It A2milk would need to make Bright Dairy happy ($200m+ for its 39% shareholding?) to buyout Synlait. If so, A2milk would need at least $400m for the 80% of Synlait shares that it does not own. On top of that are a $130m loan payable immediately and $180m bonds. Altogether, A2milk needs to pay more than $700m.

So B Dairy,s share owe them $2.30 = without knowing if they are invested in the notes !, q is how much of a hit will they be willing to take to get out of this mess .50 ?

[Balance]

So B Dairy,s share owe them $2.30 = without knowing if they are invested in the notes !, q is how much of a hit will they be willing to take to get out of this mess .50 ?

From Bright's perspective, this could be the best opportunity for them to get SML on the cheap.

But for ATM, there would already be a takeover at $1.00 imo.

The Chinese have already showed that they are prepared to buy and indeed, pay up for assets in the food sector which serves the strategic purpose of securing food supply for China.

[Bikeguy]

I just don’t see Bright getting off the bus, we are talking about the Chinese govt and their food security strategy…the money required in this situation is simply not material to them, the sums are too small …one way or another, either with their banks or what ever arrangement they decide to use these debts will be serviced and they will continue to own both SML and with the SAMR the channel partner that distributes it back to them.

[aperitif]

Bond offer TCs, note change of control

https://www.synlait.com/wp-content/u...6-Dec-2019.pdf

[Goob]

That's the extra juice under a near-term A2 / Bright takeover. Get par before December!

[Sideshow Bob]

Business Desk Today (paywalled)

Synlait's bankers will 'extend and pretend'

Debt-laden Synlait’s banks will be happy to extend and pretend to keep loan books looking healthy, a fund manager says. The New Zealand stock exchange (NZX)-listed milk company has a $130 million debt repayment due at the end of March and $180m of bonds falling due in December. Read on »

Saying thoughts are that banks would be willing to relax covenants rather than distressed loans on their books, and also more oversight.

FB reckons they need $150m to allay concerns.