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Thursday 30 June 2022

$180m Synlait placement oversubscribed

12th November 2020 By Paul Yandall | paul@foodticker.co.nz | @foodtickernz

Synlait Milk has added $180m to its coffers after successfully completing a discounted share placing.

The dual-listed company said the $5.10 a share fixed price placement – a 14% discount to the last trading price of $5.93 – attracted bids well in excess of the $180m cap.

Its two cornerstone investors Bright Dairy Holding Limited and The a2 Milk Company had committed to buying $114m of the shares between them, and Synlait said other existing institutional investors were also granted the pro-rata allocation they bid for.

Settlement of the placement is expected to occur on 17 November 2020 for the ASX and on 18 November 2020 for NZX, with allotment and commencement of trading on NZX and ASX expected to occur on 18 November 2020. 

The Canterbury-headquartered group is also tapping up retail investors via a $20m share price plan which kicks-off on 13 November.

plans to use the cash to “complete the investment phase of its strategy including the customisation of Synlait Pokeno and Auckland for processing and packaging equipment to service its new multinational customer”.

Synlait said last week that it had signed a new manufacturing supply deal with “an established, global category leader” but it did not name the customer citing confidentiality. It said then that the processing and packaging investment required to meet the new supply deal would cost $70m over two years.

The capital raise would also help strengthen the Canterbury-based company’s balance sheet to “provide more financial headroom as it navigates Covid-19, which is having an unpredictable impact on the stability of its current and future earnings”.

It would use some of the proceeds to help pay revolving credit facilities currently totalling $250m.

 

 


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