SML - Synlait

[Minimoke]

There is nothing wrong with having some conditions when negotiating a deal.

Having conditions is a very sensible thing to do.

But Synlait have said "the equity raise will only complete if it does so concurrently with the refinancing of its bank facilities. The equity raise, the recent dispute settlement with a2MC, and the bank refinancing are inter-conditional and therefore must all be approved and occur around the same time or not at all."

Seems to me that Bright and A2 (as well as synlait and their banks) are all, by their own admission acting "jointly or in concert"

[CG]

Having conditions is a very sensible thing to do.

But Synlait have said "the equity raise will only complete if it does so concurrently with the refinancing of its bank facilities. The equity raise, the recent dispute settlement with a2MC, and the bank refinancing are inter-conditional and therefore must all be approved and occur around the same time or not at all."

Seems to me that Bright and A2 (as well as synlait and their banks) are all, by their own admission acting "jointly or in concert"

It's not an admission, it's your interpretation. As I said there is nothing wrong with having conditions.

[Minimoke]

It's not an admission, it's your interpretation. As I said there is nothing wrong with having conditions.

When you have conditions, in good faith, you need conditions that you think are going to be achievable. And the best way  for them to be achievable is if you work in some way or another with other parties to help ensure those conditions can be met. Even if it just means the other party can accept and/or and work with those conditions.

[Breezy]

More fees for lawyers - waste of everybody else's time and money.

This.
And might I add that the current recap is the best outcome for retail shareholders, seems Penno is blowing his own aggrieved trumpet which is very rich when you consider the way the company went downhill big time under his leadership.

[Teitei]

This.
And might I add that the current recap is the best outcome for retail shareholders, seems Penno is blowing his own aggrieved trumpet which is very rich when you consider the way the company went downhill big time under his leadership.

https://www.farmersweekly.co.nz/news/penno-sees-better-options-for-synlait/

[Minimoke]

https://www.farmersweekly.co.nz/news/penno-sees-better-options-for-synlait/

"Penno said minority shareholders would be better off if Synlait was put into the hands of an administrator to sell the assets to the highest value owners."

He might be right. Assuming administrators can extract maximum value to repay all debts and leave something aside for the shareholders.

"Synlait's need to address fundamental issues facing it dates back to 2020. I applaud the board settling its differences with a2Milk. However, questions should be asked about how the relationship could have got in this state to begin with. " didn't he have a bit of a set to with A2 over another company?

""Bright has controlled the Synlait board since 2010, so how can moving from 39% to 65% help when it has not worked to date?" Good point!

I do disagree with Chair George Adams who says ""Our proposal recapitalises the company, pays our bondholders, provides a refinance option for our banks and ensures a viable future for Synlait group's more than 1400 employees and the nearly 260 farmer suppliers whose businesses rely on us. "

AS far as I can see all this proposal does is change the financing. it does nothing to solve the business management practices that have seen Synlait end up in the position it finds it self in. Again. So unless there are more fundamental changes than just fiddling with the balance sheet / share structure, SML will one day in the not too far distant future will be faced, once again with the prospect of trying to raise more capital. I've lost count the number of times they have had to do this


As Penno says "It should be noted that minority shareholders cumulatively own 41% of Synlait's shares" they are the biggest stakeholder. Youde think they should at least be given the option to participate in a capital raise.

Do things in haste, repent at your leisure.

[Teitei]

"

AS far as I can see all this proposal does is change the financing. it does nothing to solve the business management practices that have seen Synlait end up in the position it finds it self in. Again. So unless there are more fundamental changes than just fiddling with the balance sheet / share structure, SML will one day in the not too far distant future will be faced, once again with the prospect of trying to raise more capital. I've lost count the number of times they have had to do this

Interesting comment from you.

And yet you were very quick to change from your rabid negative view of SML to jump on board (when nothing has changed except the balance sheet, according to you)!

[Minimoke]

Interesting comment from you.

And yet you were very quick to change from your rabid negative view of SML to jump on board (when nothing has changed except the balance sheet, according to you)!

One persons "rabid" is another persons "Thoughtful and considered"

I stand by all my comments - backed up by  the share price chart since I started posting after my first encounter with leon.

If you had comprehended my posts you would have seen I thought Synlait was uninvestable for all sorts of reasons. Not so long ago it became totally uninvestible due to the huge risk around the uncertainty of  paying back the bank loan and other balance sheet requirements. The risk was the unknown. I dont like that kind of risk - so I dont put my money there.

Since then more has become known and the risk was, in my view substantially reduced. Which is why I took a punt. I wasnt "very quick to change my view". I just saw more information, analysed it, formed a view and placed an order. I saw an opportunity. But as I flagged not as a long term investment.

And then Penno has popped up. Raising more uncertainty. Which creates a risk profile I don't like.

So I sold.  Taking my 20% gain in 12 days with me.

you might like your 7% interest with no gain over 5 years for a high risk bond. But I reckon at times there are better opportunities.

[Breezy]

I see Penno more like a bug that just crawled up my arm ready to be squashed than a risk.

[Minimoke]

I see Penno more like a bug that just crawled up my arm ready to be squashed than a risk.

Put him aside, what do you think of his argument. I think he makes some fair points on behalf of minority shareholders.

[Breezy]

Put him aside, what do you think of his argument. I think he makes some fair points on behalf of minority shareholders.

He has some valid points although they are probably driven almost entirely by his personal holding size. I don't see his argument as a better option for minority shareholders in terms of how much they will get for their shares or even if a majority would vote for this option.

[Minimoke]

He has some valid points although they are probably driven almost entirely by his personal holding size. I don't see his argument as a better option for minority shareholders in terms of how much they will get for their shares or even if a majority would vote for this option.

I suspect he is motivated by partly his holding size, and I think also the way his company has gone over the past decade or so - noting of course he was on the Board (but likely neutered)

He may also have nothing to loose. His shareholding is worth so little now relative to what it was worth.

I suspect he has also had difficulty transitioning  from a "mom and Pop" business to a mega corporate. So would quite like to see the day when Dunsandel returns back to a Mom and Pop business. Smaller scale, and local.

I'd be interested in knowing his role in getting B Corp status - i dont think Bright would have been pushing that.

Needless to say I ma happy to observe 9and comment) from the sidelines again.

[Teitei]

He has some valid points although they are probably driven almost entirely by his personal holding size. I don't see his argument as a better option for minority shareholders in terms of how much they will get for their shares or even if a majority would vote for this option.

Minorities following Penno would be like turkeys voting for Christmas.

Realistically, only ATM and Bright would ever bid for Dunsandel so where's the competitive tension?

And as I have posted before (and now confirmed), ATM is but a eunuch in the saga. Bright is China and China determines who gets the SAMR.

Can't blame John Penno for trying though as he has seen his 'perceived/potential' wealth of 5.1m SML shares decrease from over $60m at its peak to being worth less than $2m today! Remember that John was in charge of SML when the go ahead for Pokeno was made and he was also a director until this year. Then, there's his own court case with ATM.

[Basil]

Can't blame John Penno for trying though as he has seen his 'perceived/potential' wealth of 5.1m SML shares decrease from over $60m at its peak to being worth less than $2m today!

WOW, that's what I call a serious haircut ! 

[Teitei]

WOW, that's what I call a serious haircut ! 

Rather sad really.

But he now wants the shares to go to zero?