SML - Synlait

[Left Field]

Trading Halt placed around tomorrows meeting....

Grab your popcorn.

https://www.nzx.com/announcements/434282

[Breezy]

You seriously believe that A2M will commit corporate hara kiri by voting against Bright's loan and put SML into receivership?

They will vote yes and participate in any CR as well.

[Basil]

There's always two possible outcomes when it comes to a vote Balance me old mate.  I have no stake in either the bonds or the shares these days, but I did sell my shares at an average price of just on $11 many years ago so quite obviously I have no clue what I'm doing 

[Teitei]

There's always two possible outcomes when it comes to a vote Balance me old mate.  I have no stake in either the bonds or the shares these days, but I did sell my shares at an average price of just on $11 many years ago so quite obviously I have no clue what I'm doing 

Of course there are always two possible outcomes - maybe even three.

So you believe A2M will vote No and put SML into receivership.

Always have time for your opinion Beagle which is why I asked.

[Teitei]

What's the third option as most of us are old and stupid?

A draw.

[Teitei]

606k shares traded today - some keen position taking ahead of Thursday vote.

Heck, some even paid up this morning to get stock!

A 10 bagger sometime in the future?

Would have been $7m+ turnover once but now, just $154k.

"Who dares wins!"

Sp up ahead of vote tomorrow and on decent 500k+ turnover again.

Again, would have been $6m+ turnover once but now, just a paltry $132k.

[Basil]

Of course there are always two possible outcomes - maybe even three.

So you believe A2M will vote No and put SML into receivership.

Always have time for your opinion Beagle which is why I asked.

I don't believe anything is certain here mate.  It's not over until the fat lady sings but clearly, it's a commercial risk until the vote is done and dusted but I foresee that there are possible different ways ATM can "milk" this situation to their advantage.  A JV with Bright on Dunsandel bought from the receivers might work?

Let me put it perhaps best, this way. I'm struggling to recall the last time a major shareholder, in a position to really heavily affect, as well as influence, the vote outcome, didn't enunciate their voting intention well before the vote date, if for no other reason than to exert their substantial influence.  Why would they withhold this considerable influence given to exert it almost guarantees the outcome?  This makes no commercial sense to me?
No other similar situation comes to mind, where such major influence has been withheld, but I am an old and forgetful Beagle these days so who knows, something similar has probably happened many times before.

You're a good guy so I hope it works out well for you mate.  Bond pricing certainly suggests most people think everything will work out okay.

From my perspective as a bean counter looking at their operating losses. Its just that the whole thing is such a  huge mess, with both the balance sheet and profit in loss in a severely distressed state, and the quantum of their indebtedness' is so, so severe.  Please forgive my morbid fascination with slow motion train wrecks but I can't help myself wondering if parties don't work to exclude $180m (the unsecured bondholders), of the debt and mitigate the size of the problem?    Just as well we can rely on the Chinese overlords who control Bright Dairy to ensure they always act with upmost integrity and honour to all stakeholders, and everything will work out okay...and we can also rely on ATM cowtoeing to Bright's behest...or can we?  We'll know a lot more this time tomorrow.

[Teitei]

Putting aside all the business posturing, on the face of it ATM have to agree to Brights loan or it would be business suicide I would have thought.
I am somewhat surprised how well ATM shares have held up given how detrimental SML going broke could be for ATM product production and feed into China.
The way I see it all posturing aside ATM have 2 options and only one really works.
1. Agree to the Bright loan and then decide whether to participate in a cap raise or not.
2. Don't agree to the loan, SML goes belly up, ATM lose any say in the matter, have to fight for the scraps of the business along with other market participants, in the meantime could lose access to China market and production of their products.

Lets not forget ATM need to look after their own shareholders, would be interesting to explain to their own SHers why they thought it would be best to let SML go broke

Forgone conclusion ATM will agree to the loan

Good summation of where things are at.

Guess that in the background, A2M has been trying to use its position to milk (pun intended) some concessions from SML.

[Teitei]

Good summation of where things are at.

Guess that in the background, A2M has been trying to use its position to milk (pun intended) some concessions from SML.

As you predicted, Snapiti, A2M to vote in favour of loan proposal.

https://www.nzx.com/announcements/434298

[Red Baron]

Trading Halt placed around tomorrows meeting....

Grab your popcorn.

https://www.nzx.com/announcements/434282

I zeriously theenk zomething memorable vill happen today.   I am not absolutely zure.   But I just have thees 'pinkling'....

RB

[Buzz]

As you predicted, Snapiti, A2M to vote in favour of loan proposal.

https://www.nzx.com/announcements/434298

ATM's announce is somewhat more hawkish. It ain't over by any stretch of the imagination, even after the $130m bank loan is paid.

https://www.nzx.com/announcements/434292

[Teitei]

ATM's announce is somewhat more hawkish. It ain't over by any stretch of the imagination, even after the $130m bank loan is paid.

https://www.nzx.com/announcements/434292

As I have written before, A2M is an eunuch.

What can A2M do?  Put SML into receivership and commit corporate hara-kiri?

"As advised by Synlait in the notice of meeting, a2MC and Synlait have been in discussions. Those discussions relate to Synlait's broader recapitalisation plan, which includes the shareholder loan as well as Synlait's proposed equity raising and concurrent refinancing of its bank facilities, and various other matters.

a2MC continues to have concerns and will engage in discussions with Synlait in the coming weeks. In the meantime, the Company confirms that it has advised Synlait that it will vote in favour of today's resolution."

[Breezy]

They will vote yes and participate in any CR as well.

This.

[SemiStrongForm]

In my view, based on almost no evidence, A2M are acting as though they don't need Synlait to be a going concern. This is consistent with their (lack of) messaging around supporting Synlait, their late disclosure of intention to vote, and the concerns raised in A2M's announcement today (read between the lines in that one!).

I understand that it is Synlait holds the A2 Platinum licence. But IMO you have to know the specifics of the arrangements to draw any conclusions on A2M's need for Synlait. They may be comfortable with Synlait entering liquidation, especially given Synalit haven't been the best partner to date.

[Breezy]

Would have been a fantastic trade at 25c now near 40c, kudos to those that took the chance.