Food and Beverage Business
Finance

Synlait seeks assistance from largest shareholder following missed debt payment

Synlait seeks assistance from largest shareholder following missed debt payment Synlait Milk Food and Beverage Business

Synlait Milk, a New Zealand dairy company, has missed a debt repayment deadline of NZ$130m ($77.7m) under its loan agreements. As a result, the company requested the suspension of its shares and bonds from trading. This delay was necessary to finalize discussions with its banking syndicate regarding an extension to the prepayment obligation.

Additionally, Synlait is seeking financial support from its largest shareholder, China’s Bright Dairy, ahead of the markets reopening on 2 April. Bright Dairy currently holds 39% of Synlait’s shares.

Synlait is also expected to release its half-year results on 2 April, which contributed to the delay in debt repayment and trading suspension. This follows a profit warning issued in February, projecting a net loss after tax of NZ$17-21m due to increased costs and lower margins.

The company’s focus on higher-margin areas like advanced nutrition and foodservice has led to a strategic shift, including the sale of Dairyworks and Talbot Forest cheeses businesses. Synlait is actively working to deleverage its balance sheet and plans to provide an update on discussions with its banking syndicate and Bright Dairy.

The ongoing contract and pricing dispute with its second-largest shareholder, The A2 Milk Co., adds further complexity. The dispute, stemming from a cancelled supply contract, has escalated into a pricing spat and is currently in arbitration.

In light of these developments, Synlait hopes to address its financial challenges and provide clarity in the coming days

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