SML - Synlait Milk Ltd

[Waikaka]

How many Synlait shares are held by farmers? If the percentage is high, then Bright and A2M have to take into account the farmer's feelings when deciding on asset sales and capital raising. Let Synlait become bankrupt and buy its valuable assets cheaply would be an option for Bright and A2M, but if farmers refuse to supply milk to them, they would have to rethink. In addition, Bright's representatives on Synlait's board must assess the chance of spending many years of life in prison if Bright's $200 m investment in Synlait disappears. That's the current operation in which the Chinese government punishes those who are responsible for business failure.

I suppose farmers might privately own shares but don't think there is a 'farmer block' in the share register per se.

39% Bright Dairy = 100% participation in cap raise
20% A2 = Maybe 0% in cap raise
15% Big Insto's = Prob support
26% Small retail = maybe 50% participation if lucky.
(cribbed from Craig's research note)

Don't know anything about how China does it but glad I have a NZ passport.