SML - Synlait

[Teitei]

If you want to participate in the capital raise isn't it better to buy a position early.

The share prices of most CR companies tend to gravitate lower towards the CR price during the CR trading period.

That's what I hope will happen here as well.

Need obviously to see the details of the CR.

SML may surprise and do a 2 for 1 at 50c instead of a 5:1 at 20c !!!!

Let's see what happens.

[Clearasmud]

The share prices of most CR companies tend to gravitate lower towards the CR price during the CR trading period.

That's what I hope will happen here as well.

Need obviously to see the details of the CR.

SML may surprise and do a 2 for 1 at 50c instead of a 5:1 at 20c !!!!

Let's see what happens.

True but it's the rights you need to have but not at 50c.

[winner (n)]

A2 keeping quiet over voting intentions

Maybe not going to vote ...sometimes a good strategy

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/434095/422255.pdf

[Teitei]

A2 keeping quiet over voting intentions

Maybe not going to vote ...sometimes a good strategy

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/434095/422255.pdfOca

Link does not work because you have tagged oca to the link.

OCA occupying your thoughts day, night and in every post W69?   

[winner (n)]

Link does not work because you have tagged oca to the link.

OCA occupying your thoughts day, night and in every post W69?   

No idea how that happened lol

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/434095/422255.pdf

[Basil]

The plot thickens.  Normally a major shareholder in a position to heavily influence the outcome, would have indicated one way or the other by now.  I'd say that's a bit ominous for Synlait's future.

[winner (n)]

The plot thickens.  Normally a major shareholder in a position to heavily influence the outcome, would have indicated one way or the other by now.  I'd say that's a bit ominous for Synlait's future.

Unless A2 vote NO it's a done deal, even if they don't vote

Amongst other shareholders Whose going to vote NO ..hardly any I'd say.

[Poet]

Unless A2 vote NO it's a done deal, even if they don't vote

Amongst other shareholders Whose going to vote NO ..hardly any I'd say.

Actually I'm very surprised that A2M haven't announced their intention. surely this should be considered as price sensitive information (for ATM shares).

If they intend to vote 'no' then there is a high chance that SML will be put into receivership which will have uncertain (but definitely price moving) impacts on ATM.

Maybe their silence implies that they will vote 'yes'

Personally, for my smallish, but not insignificant holding. I'm voting a definite 'no' working on the assumption that whatever Bright dairy wants the small shareholder to do probably won't be of benefit to the small shareholder. I'd rather take my chances with receivership than willingly aid and abet Bright to whatever final game plan they have in mind.

Post receivership, I can certainly see a credible scenario where ATM makes a decent offer for the Dunsandel asset(with price tension provided from Bright and possibly Fonterra).

[Teitei]

A2M can wave goodbye to its China IF business if it votes no to the loan.

Anyone who believes that should be shorting the hell out of A2M (and SML). Plenty of $$$ to be made.

https://www.nzherald.co.nz/business/synlait-can-recover-chinas-bright-dairy/CD4OAZYKZVGVDISAFWATJIWKN4/

In the interview with the Herald, Bright's Chairman said:

"Both a2 and Bright Food want to Synlait to stabilise. Without Synlait, there would not be prosperity for a2 Milk".

[SemiStrongForm]

I suspect A2M is voting no. In my mind there are three scenarios, ie, A2M:

• votes yes, but aren't announcing intentions to depress the share price prior to a capital raise
• votes yes, but don't announce intentions because they are wanting to maintain arms lengths distance from all Synlait matters (this one I am least sure about)
• votes no, to draw to an end Synlait's on-going demise (and remove distractions, ie, arbitration proceedings)

I think the third option is looking quite likely.

[BlackPeter]

I suspect A2M is voting no. In my mind there are three scenarios, ie, A2M:

• votes yes, but aren't announcing intentions to depress the share price prior to a capital raise
• votes yes, but don't announce intentions because they are wanting to maintain arms lengths distance from all Synlait matters (this one I am least sure about)
• votes no, to draw to an end Synlait's on-going demise (and remove distractions, ie, arbitration proceedings)

I think the third option is looking quite likely.

The cynic in me might agree. Just wondering, though what A2M is planning to sell after they voted no and pushed Synlait into liquidation?

You might want to check what percentage of their earnings comes from A2 Platinum ... and who other than Synlait (in the current ownership structure) is allowed to import that into China. After you find the answers, it might be a good time to reconsider option 3;

[SemiStrongForm]

The cynic in me might agree. Just wondering, though what A2M is planning to sell after they voted no and pushed Synlait into liquidation?

My understanding is that a liquidator will seek to maximise the value of the business. In theory, this would mean Synlait or its component parts would be put up for sale, including to the likes of A2M and Bright, potentially as part of a joint venture.

[Hectorplains]

My understanding is that a liquidator will seek to maximise the value of the business. In theory, this would mean Synlait or its component parts would be put up for sale, including to the likes of A2M and Bright, potentially as part of a joint venture.

Yes but you perhaps are underestimating the value that other bidders would put on Dunsandal.  It is the key asset. 

If a joint venture for Bright and A2 was the go - why would they muck around with receivership when they could take Synlait private?

[Left Field]

Crikey.....The silence from A2M is deafening.

Another viewpoint to consider....... from Werdplayer on HC

Whichever way A2M votes, there really is no need for them to disclose this to Synlait beforehand. It would be a courtesy that Synlait has not earned. Synlait should have dropped the exclusivity matter long ago, it has only done them a lot of damage and continues to do so.

As I've said for some time, I really don't think Bright would ever allow Synlait go under. Full stop. Their comments recently seem to confirm this. It is also unlikely they would relinquish control of Synlait and its Dunsandel facility.

If you accept this, then it also follows that A2M's supply remains secure in the likeliest scenarios where they do not approve this loan.

Not approving the loan will then set in motion the negotiations between A2M and Bright about takeover scenarios for Synalit. Either a bidding war or a JV.

Even if Bright were to acquire effective ownership of Synlait they would still need A2M as a customer to make it financially viable. Their higher ups are not going to sign off on a takeover of Synlait without retaining the business that A2M brings.

And if A2M were to take a greater stake, they would presumably rather retain the mutual cooperation and investment of Bright as a partner, given how capital intensive manufacturing is (particularly in light of Synlait's problems).

Which is why I think a JV ultimately makes the most sense here, but a No vote by A2M on the loan is required in order to get there.

[BlackPeter]

My understanding is that a liquidator will seek to maximise the value of the business. In theory, this would mean Synlait or its component parts would be put up for sale, including to the likes of A2M and Bright, potentially as part of a joint venture.

Sure.

I assume you realize though that Synlait's export licence for China is subject to the factory not changing ownership, which it would as soon as the company goes into administration. So - unless you tell us that A2M has made already a secret deal with the Chinese licence authority to make sure they change the licence "on the fly", they will have problems to export any IF to China until this is sorted. Dangerous game to risk the cash cow.

Hint - the current export licence (which Synlait is holding) took many months to obtain.

Of course is it possible that A2M and the Chinese Licence Authorities made a secret backroom deal, though not notifying it appears to be at least a violation of A2M's continuous reporting requirements.

More likely might be that A2M got a wink wink nudge nudge from somebody they assume knows what the Chinese licence authorities might do ... but it appears to be a bit risky to risk the farm on that.

Whatever it is - it all feels more than a bit fishy. If ATM would sell fish which passed its use by date, we could at least explain the stink.