SML - Synlait Milk Ltd

[mondograss]

Thats the problem with that root, they probably won't have a extra 100 million lying around. Currently NZIPL does have the stronger claim. I'm sure the factory has cost a lot, so maybe even more future planning can be done and they can buy a extra 84.5 Hectares haha. This is a problem that only a lot of money can solve, either by buying something at a huge premium or ending this in a huge loss.

It depends a little bit on how much NZIPL is concerned about the factory itself vs the presence of the factory derailing its plans for its own land. If the latter then you'd think Synlait could contract out of the issue by agreeing not to contest any resource consent that NZIPL put up or agree to new covenants that allow both parties to do as they please. If the former then I'd say Synlait are screwed and Stonehill are never going to have enough money to compensate them.

[Beagle]

I think its high time to look at a worse case scenario. $260m / 179m shares = $1.45 per share plus loss of future earnings, possible compensation to affected farmers who have signed for the 2019/20 season, legal costs, appellant legal costs plus possible damages to ATM for loss of contractual supply + possible consequential damages, + reputational damage, less what's possibly recoverable from Stonehill, if anything. Its potentially extremely UGLY !
Let's not forget this is a very highly indebted company with all this new capacity built on bank debt. I am sure their bankers would be "most impressed" Possible cash issue coming to fund this massive **** up ?

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[mondograss]

It does seem though that SML have kept themselves at arms length and relied on STL to get it sorted which was clearly a mistake as they've not proven capable and may not have negotiated in good faith.

It may be that now SML has to get involved in earnest (and from a very weak position) and then seek recompense from STL later.

It was interesting reading the judgement that no-one was clear how much the possible quarry might impact on the dairy factory, which would imply that no-one had asked SML whether it would necessarily be a problem. One would assume that dairy factories are fairly tightly contained against outside contaminants so dust etc would surely not be an issue.

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[Beagle]

SML have been neck deep in the dodo from day one. They knew of the covenants because they have the compo clause in the purchase agreement. It is disingenuous of them to say in their latest Announcement:
“Synlait only took legal title to the land after the High Court decision removing the land covenants."

They turned soil without legal title in full knowledge of the covenants. Its shareholders who did not know.

In my opinion that amounts to gross recklessness and concealment from shareholders.

[777]

Surely a reasonably large shareholder (ATM) has had something to say about it all.