SML - Synlait

[Minimoke]

Big box of popcorn required here.

Lots of water to go under the bridge yet, time pressures starting and games to be played out.

The good old slow motion trainwreck.....

I've put on 15 kilos with the buttered popcorn I have consumed watching this train wreck over the years.

[Sideshow Bob]

I've put on 15 kilos with the buttered popcorn I have consumed watching this train wreck over the years.

Compulsive viewing, but more running must be required MM! 

[Teitei]

Big box of popcorn required here.

Lots of water to go under the bridge yet, time pressures starting and games to be played out.

The good old slow motion trainwreck.....

Agreed.

And like SKT, NZK and AIR, there's plenty of money to be made!

[Basil]

I've put on 15 kilos with the buttered popcorn I have consumed watching this train wreck over the years.

I am buying it by the 20kg wholesale pack. In terms of train wreck viewing, Synlait is the gift that keeps on giving

[Minimoke]

I am buying it by the 20kg wholesale pack. In terms of train wreck viewing, Synlait is the gift that keeps on giving

Someone will write a text book on them one day.

[Teitei]

One possible headline soon :

"Synlait to sell Dunsandel plant to ATM for $550m. All disputes between the two parties discontinued."

[snapiti]

I'm not so sure price is relevant.

I think it safe to assume Bright and A2 will take up 60 % forcing minority shareholders to participate to ensure their holdings are not diluted to nothing.

So the only question is how much are Bright and A2 prepared to chuck in the pot.

the answer to that is easy....."as little as possible"

[Basil]

Someone will write a text book on them one day.

Titled "How ESG destroyed a company"

[Minimoke]

Support at $0.89 seems to have dried up

2 weeks later we have trades today at $0.78. Closed today at $0.80

[BlackPeter]

One possible headline soon :

"Synlait to sell Dunsandel plant to ATM for $550m. All disputes between the two parties discontinued."

Actually - if I remember correctly is the Chinese import licence defining as well the owner of the factory which produces the infant formula: Synlait. A change of ownership would void the import licence.

This means:
1) Bright Diary (as 40% plus shareholder) would need to agree
2) Chinese authorities (as issuer of the import licence) would need to agree
and yes,
3) Retail shareholders would need to agree (material change of assetbase).

Not worried about the retail shareholders, but how likely is 1 and 2, unless these changes would be good for the empire of the middle?

[Sideshow Bob]

2 weeks later we have trades today at $0.78. Closed today at $0.80

I think if you'd got this far, you'd just hold on tight and ride it into the ground....

[Teitei]

Actually - if I remember correctly is the Chinese import licence defining as well the owner of the factory which produces the infant formula: Synlait. A change of ownership would void the import licence.

This means:
1) Bright Diary (as 40% plus shareholder) would need to agree
2) Chinese authorities (as issuer of the import licence) would need to agree
and yes,
3) Retail shareholders would need to agree (material change of assetbase).

Not worried about the retail shareholders, but how likely is 1 and 2, unless these changes would be good for the empire of the middle?

Good points.

1.  A deal will obviously only happen with Bright Dairy which one assumes will be happy to agree if they do not want to put in more money into Synlait. This is not my view as I believe the Chinese take a long term view.

2.  The SAMR registration attaches to the Dunsandel plant so presumably with the close ties between China entities and government, if 1 above is forthcoming, then 2 will happen.

Here's what Synlait says :

" Synlait continues to hold the Chinese regulatory State Administration for Market Regulation (SAMR) licence which is attached to Synlait's Dunsandel manufacturing facilities. The licence is for The a2 Milk Company's Chinese labelled 至初® Infant Formula (stages one, two and three), the company expects to manufacture those products for The a2 Milk Company for products destined for the China market for the period of that licence (currently expiring September 2027)."

[Minimoke]

Now 38 working days to find at least $130m. SP today around $0.83

[Teitei]

Now 38 working days to find at least $130m. SP today around $0.83

Plenty of time.

An underwritten CR takes less than 1 month to be completed. The devil is on the structure of the CR so that 'certain' parties can best benefit from the CR.

Another scenario my contact in one of the China banks operating here is that the bank debt will be refinanced by overseas banks.

[Basil]

How are you getting on with those Synlait bonds you bought at 17-18% mate ?