SML - Synlait

[Minimoke]

Synlait appointing George Adams as an Independent Director. On Georges CV is his Arborogen Directorship. A seed company based in the USA.

Lets look at their SP
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[BlackPeter]

Synlait appointing George Adams as an Independent Director. On Georges CV is his Arborogen Directorship. A seed company based in the USA.

Lets look at their SP
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George Adams' biography

George has outstanding commercial and governance experience with over 30 years of international business experience in the fast-moving consumer goods and telecommunications industries and an occupational health and safety background.

Before focussing on governance, George held a range of executive leadership positions. Notably he was, Managing Director of Coca-Cola Amatil New Zealand and Finance Director of British Telecom, Northern Ireland. George's previous governance highlights include being Chair of Bell Tea & Coffee, Chair of the New Zealand Grocery Council and Occupational Health and Safety Board and a Director of Hellers Group and Tegel Foods.

Yes, Arborgen is a shootoff from Fletcher Forest and George on their board. They lost over the years plenty of shareholder capital!

But wait - there is more, hasn't he as well Tegel Chicken on his CV?

Quite relevant experience if destroying shareholder funds is what Synlait is after ...

[Minimoke]

Yes, Arborgen is a shootoff from Fletcher Forest and George on their board. They lost over the years plenty of shareholder capital!

But wait - there is more, hasn't he as well Tegel Chicken on his CV?

Quite relevant experience if destroying shareholder funds is what Synlait is after ...

I havent followed Tegal.

But I used to hold Arborogen., And all I recall is a company that promised a lot and delivered little. Seemed to pay board well. And always had a weather event as an excuse  for failure to execute to plan

[Basil]

"Purrfect" appointment then lol

[Minimoke]

Tick Tock. Tick Tock.

Synlait is required to make a mandatory prepayment of at least $130 million by no later than 31 March 2024.
31 March is a Sunday. 29 March is Good Friday.

No announcement today of the sale of Dairyworks or re-financing plans.

So by my reckoning they now have 19 working days to stitch together a plan

[Minimoke]

Synlait (SM1) gets removed from the All Ordinaries Index effective prior to the Open on March 18, 2024

[bulltrap]

Synlait (SM1) gets removed from the All Ordinaries Index effective prior to the Open on March 18, 2024

Found a copy of the changes here. Bubs (BUB.ASX) is out with the bathwater too.

Also of note to NZ watchers, Gentrack (GTK.ASX) is in.

[Minimoke]

On 10 February 2023 Synlait announced they would release their half year results would be released on Monday 27 March.

This year on 6 March they announce they will release results on Tuesday 2 April

Half year ends on 31 January. They have 60 days to release results. So Tueday 2 April is the very last day they can release results.

It is also after 31 March when the $130m is due to be repaid.

Talk about taking things to the wire. Not a sign of good management my mind.

Which leads me to wonder about the dealy. My money is on the auditors going through accounts line by line and looking at their liability exposure for every entry.

[Minimoke]

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.

By my reckoning Synlait now have 13 working days

[Teitei]

By my reckoning Synlait now have 13 working days

I believe Businessweek already broke the news that the banks are rolling over the loans?

[Buzz]

I believe Businessweek already broke the news that the banks are rolling over the loans?

That's the only lever the banks (creditors) have, other than relaxing covenants as well. It's also the path of least resistance, but banks don't like taking on more risk and SML has proven to be a severe credit risk. Stands to reason they would hold out until the last minute, maybe happy not to take on more risk but transfer the risk to another banking (syndicate?) and walk away, or some white knight play eventuates, which still may happen. It is in nobodies interest that SML fails. As Mini says 'tick tock' time is running out.

[Minimoke]

I believe Businessweek already broke the news that the banks are rolling over the loans?

the debt repayment is a material issue. If it has been resolved there should have been a market announcement. (Im very wary of anything written in Media - all very untrustworthy)

[Minimoke]

That's the only lever the banks (creditors) have, other than relaxing covenants as well. It's also the path of least resistance, but banks don't like taking on more risk and SML has proven to be a severe credit risk. Stands to reason they would hold out until the last minute, maybe happy not to take on more risk but transfer the risk to another banking (syndicate?) and walk away, or some white knight play eventuates, which still may happen. It is in nobodies interest that SML fails. As Mini says 'tick tock' time is running out.

lets assume for a moment this is correct.

What does it achieve?

Firstly i guess banks can extract an even higher interest rate than currently paid by synlait. Good for banks. Bad for synlait.

Its obvious synlait are making a loss. So extra interest payments will stretch cashflw further and increase loss. Which in turn devalues business.

So where is $130m going to com from. Dsiry eorks is the only current option. And if that doesnt play out bond holders are due repayment in December.

Even if the banks have refinanced i still see zero hope for bond holders.

[Teitei]

lets assume for a moment this is correct.

What does it achieve?

Firstly i guess banks can extract an even higher interest rate than currently paid by synlait. Good for banks. Bad for synlait.

Its obvious synlait are making a loss. So extra interest payments will stretch cashflw further and increase loss. Which in turn devalues business.

So where is $130m going to com from. Dsiry eorks is the only current option. And if that doesnt play out bond holders are due repayment in December.

Even if the banks have refinanced i still see zero hope for bond holders.

If you believe that, you should be shorting the hell out of SML shares as they will be worth ZERO before the bondholders lose anything.

[Minimoke]

If you believe that, you should be shorting the hell out of SML shares as they will be worth ZERO before the bondholders lose anything.

I haven't seen any strategy that provides for the repayment of bonds. If there is one I'd be interested in seeing it.