SML - Synlait

[Teitei]

If they want what will be 15% of retail shares after the recap then they will have to pay for them or wind up, even if they delisted they still wouldn't own them. I agree its not fair to minority shareholders who paid above current sp but life isn't fair, ask me how I know.

I don't think Bright wants the other 15%.

It helps SML's profile to be a NZ listed company - dairy products from the land of quality milk and honey.

[Breezy]

I don't think Bright wants the other 15%.

It helps SML's profile to be a NZ listed company - dairy products from the land of quality milk and honey.

Probably not but I was just highlighting what they would have to do to obtain them if they desired and I see plenty of upside from the current sp as opposed to Basils normal very negative stance once he's sold his shares.

[Teitei]

Probably not but I was just highlighting what they would have to do to obtain them if they desired and I see plenty of upside from the current sp as opposed to Basils normal very negative stance once he's sold his shares.

By definition, why would anyone sell something unless they feel negative or buy something unless they feel positive?

I do however observe with some amusement how rabidly vocal some posters were about Synlait's survival prospects (despite unequivocal assurances from Bright), and how quickly they jumped onboard the 'recovery' story when the assurances materialised!

All cool - that's how the market works and how glaring opportunities like bonds yielding 100%+ becomes available!

[Basil]

I genuinely thought we were in for a 4 or 5:1 deeply discounted rights issue so the outcome was a genuine surprise and not a situation I am willing to tolerate.  The fact that Bright and ATM were favored the way they were and that Bright as a CCP controlled company now completely dominates the company, makes it uninvestable for me at any price.
There are so many ways to skin a cat when it comes to a dominant shareholder manipulating things for their own outcome, minority shareholders are in a very invidious position with no effective representation on the board. I doubt shareholders will ever see a dividend.

[snapiti]

I genuinely thought we were in for a 4 or 5:1 deeply discounted rights issue so the outcome was a genuine surprise and not a situation I am willing to tolerate.  The fact that Bright and ATM were favored the way they were and that Bright as a CCP controlled company now completely dominates the company, makes it uninvestable for me at any price.
There are so many ways to skin a cat when it comes to a dominant shareholder manipulating things for their own outcome, minority shareholders are in a very invidious position with no effective representation on the board. I doubt shareholders will ever see a dividend.

am I reading this right, how can you possibly be surprised that the final outcome will have favor to major shareholders.
Take another look at the perilous position the company got itself into and the power this afforded the major SHers. 

[Basil]

I thought the independent directors would protect minority shareholder interests and that they would do the capital raise at the same price for everyone, probably with Bright underwriting it.  Silly me...but I got out with a reasonable profit so have dodged a bullet.  Those hanging in there expecting the independent director(s) in the future will protect their interests given Bright are now in such a dominant position, are even more naïve than I was.
I got a reasonable feed so I really don't care anymore and won't ever be back so its game over as far as I am concerned.

[Breezy]

I thought the independent directors would protect minority shareholder interests and that they would do the capital raise at the same price for everyone, probably with Bright underwriting it.  Silly me...but I got out with a reasonable profit so have dodged a bullet.  Those hanging in there expecting the independent director(s) in the future will protect their interests given Bright are now in such a dominant position, are even more naïve than I was.
I got a reasonable feed so I really don't care anymore and won't ever be back so its game over as far as I am concerned.

You didn't dodge any bullet, plenty of upside from here. You just transacted a swing trade, that's it.

[Minimoke]

By definition, why would anyone sell something unless they feel negative or buy something unless they feel positive?

I do however observe with some amusement how rabidly vocal some posters were about Synlait's survival prospects (despite unequivocal assurances from Bright), and how quickly they jumped onboard the 'recovery' story when the assurances materialised!

All cool - that's how the market works and how glaring opportunities like bonds yielding 100%+ becomes available!

As I mentioned in early posts. The Synlait we knew then is not the Synlait we will know going forward.

For retail shareholders, Synlait  has, for all intents and purposes gone.

"assurances materialised" is also known as better understanding the risk based on known information.

[Basil]

https://www.chrislee.co.nz/taking-stock
https://www.nzshareholders.co.nz/scrip-article/retail-shareholders-swallowing-dead-rats-at-synlait/

[Breezy]

As I mentioned in early posts. The Synlait we knew then is not the Synlait we will know going forward.

For retail shareholders, Synlait  has, for all intents and purposes gone.

"assurances materialised" is also known as better understanding the risk based on known information.

Happy to take a $1/share from Bright if they want my 40c shares.

[Teitei]

As I mentioned in early posts. The Synlait we knew then is not the Synlait we will know going forward.

For retail shareholders, Synlait  has, for all intents and purposes gone.

"assurances materialised" is also known as better understanding the risk based on known information.

Yet you were very keen to jump back on board on the materialization of the assurances?

"For retail shareholders, Synlait  has, for all intents and purposes gone." Interesting!

Still got the shares? 

[BlackPeter]

article in the Business Desk:

https://businessdesk.co.nz/article/primary-sector/how-bright-dairy-plans-to-turn-synlaits-losses-into-profit

(probably paywalled, and clearly not worth-while to buy a subscription to read this article)

Anyway - in a nutshell: Based on Bright Dairies announcement on the Shanghai Stock Exchange is their amazing plan to profitability for Synlait as follows:

"reduce unnecessary consulting service fees, improve inventory management and reasonably reduce inventory to improve cash flow."

Ah yes, and they quickly hired some consultants (to reduce the unnecessary consulting fees?):

"Bright has appointed corporate affairs consultants Shanahan Partners to help it with its NZ communications and Forsyth Barr is advising the Chinese firm on the placement."   

Amazing! they didn't explain however that Bright always controlled the board. Not quite clear to me why this wisdom is only eventuating since they have a 2/3rd board majority (as compared to a simple majority so far).

It is getting clearer and clearer to me why Synlait is stuck so deep deep in the proverbial. Just look who always controlled the board. Quite funny that the people who did run them into it are now claiming they have an amazing plan to get them out.

But hey - probably just another smoke and mirrors event. I am sure the dragon has a diabolical plan it doesn't want to communicate to simple beings like us.

[Minimoke]

Yet you were very keen to jump back on board on the materialization of the assurances?

Why not. Act on known information taht derisks a situation rather than gamble of the unknown. Thats me!

"For retail shareholders, Synlait  has, for all intents and purposes gone." Interesting!

Isnt it. Just as I said it would turn out.

Still got the shares? 

In the interests of transparency you will see in my posts I declare when I buy and sell. If you took the trouble to read my posts you would see the answer to this question

[Minimoke]

 Interesting complaint from John Penno

"The notice of complaint asserts that under the NZX Listing Rules and Takeovers Code, Bright and a2MC should not be able to vote on resolutions relating to the recapitalisation, leaving only shareholders other than Bright and a2MC being able to vote on the two resolutions."

Seesm to me it might have merit - based on the fact that Bright stood aside on the decision to loan Synlait $130m

if we remember:

"The meeting is to vote on the resolution to approve the proposed entry into a $130 million shareholder loan to be made available to Synlait by Bright Dairy
International Investment Limited, a related company of Bright Dairy Holding Limited, Synlait's 39.01% shareholder..........

Bright Dairy cannot vote in favour of the resolution; as such, the Directors appointed by Bright Dairy have abstained from making a recommendation."

Edit and in the interests of transparency I have sold out taking my 20% gain. Some unknown = risk again.

[Basil]

https://api.nzx.com/public/announcement/436976/attachment/425885/436976-425885.pdf

The situation is indeed noteworthy. It seems reasonable to concur that Bright and ATM ought not to be eligible to vote, considering the significant marginalization of minority shareholders in this recapitalization proposal. Penno's complaint appears to have substance, and in the interest of upholding the integrity of NZX's takeover regulations—which this effectively resembles a takeover—I hope the NZX concur. Clearly, Penno feels aggrieved; however, it is also noted that he served on the board until May 2024, implicating him in the remarkable debacle that Synlait has become.
Clearly, the risk of insolvency and non-repayment of the unsecured bonds just ratcheted up several notches.