SML - Synlait

[Basil]

Much less of a gamble today than it was over the prior few month.

What do you reckon on the capital raise mate.  Place your bets.  X for 1 @ Y cents.
What's your best guess for the values of X and Y ?
Off Jarden website they reckon 466.77m shares.
I reckon to have all bases covered they need to raise about $350m.  If Y is 30 cents that's 1166m shares so maybe its 2.5:1 @ 30 cents.
What do you reckon ?

[Left Field]

Minds all coming together, must be as good as Mothers Milk.

As they say, "Great minds think alike"...... good to see Stocktalkers benefitting from sharing info.

Onwards and upwards..... however there is just the small Cap raise to get sorted..... so it may take a while but prospects look good. 

[Minimoke]

What do you reckon on the capital raise mate.  Place your bets.  X for 1 @ Y cents.
What's your best guess for the values of X and Y ?
Off Jarden website they reckon 466.77m shares.
I reckon to have all bases covered they need to raise about $350m.  If Y is 30 cents that's 1166m shares so maybe its 2.5:1 @ 30 cents.
What do you reckon ?

Hmm. Im going to have  relook at there accounts now they have another 27m flowing in. Need at least enough to pay back $180m in bonds and Bright.

[BlackPeter]

Whatever happened to the "International New Client" (Nestle) for Pokeno did they ever get that of the ground or is it still lingeriing in the background.
Asset value SML 600 million - Market cap 65.57 million at 0.35c - seems like it might have room to run.

Yes, room to run .. but don't forget the capital raise. While I am rather sure it will work, it might reduce the runway ;

[Basil]

Hmm. Im going to have  relook at there accounts now they have another 27m flowing in. Need at least enough to pay back $180m in bonds and Bright.

Yeah, I just did a real quick "back of the envelope" to come to $350m.
$180m for the bonds, $130m for Bright and $40m for working capital.
Maybe they need more, I haven't really looked that hard.

[Teitei]

Developments all as expected so am reading with amusement.

What's new?

[Minimoke]

Lets look at some numbers
Current liabilities exceed current assets by $205m. $180m is owed to bond holders.

They have an awful lot of inventory in these assets - $316m (contrast this with A2 Milks $180m in inventories.)

Accounts payable exceed accounts receivable by $177m (a2's $27m cash hold back will be in here)

Total assets exceed total liabilities by $700m. But this is likely grossly over valued eg no one wants to buy dairy works for $120m. There is no sign of Pokeno selling (and A2 have indicated they need waikato farm supply)

Cash on hand is $30.5m

So how much do they need?

I reckon, since they have both Bright and A2 on board for an equity raise, they should do it once and do it right.
I don't think Bright will be looking for their $130m back at this stage – lets cover that debt off with inventory. Also Dairyworks might sell – but lets not bank on that. At least it is adding to profitability in the meantime.

I think if they get a capital raise over the line banks will remain happy – so no need to worry about paying them back.
$180m to pay back bond holders.
$177m to pay off short term creditors – need to give confidence back to farmers and suppliers.

That gets me to $357m. Lets keep this simple and call it $350,000,000 capital raise.

Now they have 218.581m shares allocated at the moment. This means they need $1.60 from each shareholder

Lets say the one week VWAP is $0.35

This now gives me 4.475 share rights issue at $0.35 for each single share held

Change my mind!

[Minimoke]

Now, by chance, a rights issue as mentioned below would mean there would be 1,000,000,000 shares issued.

Bringing the registry to 1,218,581,661 shares.

Now, if shares maintained a value of $0.35 this would give a market cap of $426.5m. Compared with todays $65.57m

On todays dollars that would have a Share price of $1.95. This may not be too outrageous - it was only back in the beginning of June 2023 the SP was $1.88

From May 2021 - March 2023 SP was over $3.00

[Basil]

Lets look at some numbers
Current liabilities exceed current assets by $205m. $180m is owed to bond holders.

They have an awful lot of inventory in these assets - $316m (contrast this with A2 Milks $180m in inventories.)

Accounts payable exceed accounts receivable by $177m (a2's $27m cash hold back will be in here)

Total assets exceed total liabilities by $700m. But this is likely grossly over valued eg no one wants to buy dairy works for $120m. There is no sign of Pokeno selling (and A2 have indicated they need waikato farm supply)

Cash on hand is $30.5m

So how much do they need?

I reckon, since they have both Bright and A2 on board for an equity raise, they should do it once and do it right.
I don't think Bright will be looking for their $130m back at this stage – lets cover that debt off with inventory. Also Dairyworks might sell – but lets not bank on that. At least it is adding to profitability in the meantime.

I think if they get a capital raise over the line banks will remain happy – so no need to worry about paying them back.
$180m to pay back bond holders.
$177m to pay off short term creditors – need to give confidence back to farmers and suppliers.

That gets me to $357m. Lets keep this simple and call it $350,000,000 capital raise.

Now they have 218.581m shares allocated at the moment. This means they need $1.60 from each shareholder

Lets say the one week VWAP is $0.35

This now gives me 4.475 share rights issue at $0.35 for each single share held

Change my mind!

Same amount I came to in post #1245 above.  $350m.  I made a mistake with the number of shares on issue in my quick back of the envelope calculations above and concur with your figures.  So, we're looking at about 4.5:1 @ 35 cents or they might make it 5:1 just to keep the math's a bit simpler for people and to raise some additional working capital.  At this stage, given we know there's a massive capital raise coming I haven't bought many, just bought the ones I sold at $11 several years ago, back for 35 cents.  Might be quite a while before they get back to $11 again lol

[lorraina]

I sold my small holding this morning.

[BlackPeter]

I sold my small holding this morning.

I sold half of my holding yesterday (and made a nice profit ; - Just being careful to not overcommit for the coming CR.

[Teitei]

I sold half of my holding yesterday (and made a nice profit ; - Just being careful to not overcommit for the coming CR.

Have around $1 cash for each share you own for the CR and you Will be right!

[Left Field]

Developments all as expected so am reading with amusement.

What's new?

Kudos to you Balance..... you have read the SML saga very well and I'm sure your bond investment will be richly rewarded. Well done.

[BlackPeter]

Have around $1 cash for each share you own for the CR and you Will be right!

Roughly $220m shares after their last CR (I think) - so, you think $220m will be enough for them this time?

To be honest, I budgeted a bit more, but hey, I can live with that as well.

[Breezy]

Wonder if the rights issue will be renounceable or not?