SML - Synlait

[Basil]

Thanks Winner, I haven't been following this train wreck very closely for a while now.  ATM's stake now worth $69m.

[winner (n)]

Thanks Winner, I haven't been following this train wreck very closely for a while now.  ATM's stake now worth $69m.

....total investment $322m

[Minimoke]

Thanks Winner, I haven't been following this train wreck very closely for a while now.  ATM's stake now worth $69m.

At half year Synlait was carrying $440.934m of debt.
With over half their assets being tied up in stainless steel.

The updated the other day with expected loss of $27 - $40m

Once they have their other production facilities they can very easily shed Synlait.

Or buy it off Bright fro a song.

[Minimoke]

....total investment $322m

I reckon A2 totally ignore that number. The only value for them is what Synlait can produce. Which synlait hasn't been above to produce to expectations this last 1/4.

Despite chucking $322m in the pot A2 still have over $1b in cash. I would say Synlait is far from being out of the woods at the moment

[Basil]

I would say Synlait is far from being out of the woods at the moment

Its nothing yet another capital raise of a few hundred million won't fix ROFL

[Minimoke]

Announcement today that someone appears to be interested in Pokeno. Wont be A2.

" A report in The Australian overnight said Abbott Laboratories was believed to be in talks with Australian-listed milk producer Synlait to buy its Pōkeno factory south of Auckland.

US-based Abbott is a customer of Synlait's at the site."

discussions are incomplete, no binding terms are agreed, and there is no certainty that a transaction will occur

[Sideshow Bob]

Why is it that often the best/first source of developments in NZ is often Australian publications??

[bulltrap]

Why is it that often the best/first source of developments in NZ is often Australian publications??

The Australian's Dataroom column seems to have a reputation for publishing flimsy rumours. But to counter that, just because a rumoured transaction doesn't always play out, doesn't mean it wasn't genuinely considered and discussed.

My pet theory is that columns like this function as an 'information laundering' service, for converting 'inside info' into 'public info', thereby giving insiders legal ass-coverage for trading.

[Minimoke]

The Australian's Dataroom column seems to have a reputation for publishing flimsy rumours. But to counter that, just because a rumoured transaction doesn't always play out, doesn't mean it wasn't genuinely considered and discussed.

My pet theory is that columns like this function as an 'information laundering' service, for converting 'inside info' into 'public info', thereby giving insiders legal ass-coverage for trading.

I reckon they look at the broker accounts who subscribe to them. And when brokers want to off load shares this is helped by positive "news"

[bulltrap]

I reckon they look at the broker accounts who subscribe to them. And when brokers want to off load shares this is helped by positive "news"

If the rumour is '<fund> is understood to be "running the ruler" over <company/asset>', that might be code for '<fund> already decided not to bid for <company/asset> and wants to sell their stake' - particularly if <fund> is actually quoted in the article as saying they were interested.

For current case though, SML's announcement this morning all but confirmed the rumour was accurate.

As for the Aussie angle, both A2 and Synlait are dual-listed on the ASX, so the news is relevant to West Island readers at least. But why NZ journos don't field or publish such chatter is a very good question still.

(Abbott BTW is US-based and in the S&P 100.)

[Hectorplains]

Debt announcement today.  Okay so Synlait has bought itself some breathing space... but not much.  They're still constrained by short-dated funding (most facilities only run to June 2026), tight covenants, and reliance on Bright Dairy.

Strengthens the possibly of them needing a CR before the next rollover.

[Minimoke]

$130m borrowed from Bright

Now with an extra $350m in bank funding.

[Hectorplains]

Still 8 banks with Kiwi bank-out and East Asia-in.  A lot of banks for a business of this size...

[Hectorplains]

NZX's worst kept secret confirmed: entry into a binding conditional agreement to sell the North Island assets to Abbott for  $307 million. 

They shelled out over $450m building Pokeno, it sits on their books at $340m and now a sale of $300+ will be considered... a success. 

[ken]

https://www.nzx.com/announcements/461267