September 18, 2024 • 4 mins
Synlait's two biggest shareholders have brought it back from the brink.
Shareholders today approved a $218 million capital injection from Bright Dairy and A2 Milk.
NZ Shareholders Association CEO Oliver Mander says some shareholders were reluctant ahead of this vote - but plenty were on board.
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Speaker 1 (00:09):
You're listening to a podcast from Newstalks'd be follow this
and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Sinley was thrown a bit of a lifeline today, but
it is going to have to massively lift its game
if it wants to avoid another bailout in the near future.
The shareholders voted in favor of a two hundred and
eighteen million dollar equity raise. Bright Dairy obviously contributed the
Lion's share It's now got sixty five percent of Sinley
and a two put in about thirty three million bucks
and keeps its almost twenty percent stake. Olive Amander from
(00:37):
the Shareholders Association was at the meeting this morning.
Speaker 3 (00:39):
Is with us? Now, hey, Oliver, good evening.
Speaker 2 (00:42):
HA tough on the minority shareholders, say, very tough on.
Speaker 3 (00:46):
The minority shareholders. I mean, look for minorities. This really
is a bit of a dead rat. But they've swallowed
that dead rat today. They've taken the medicine and Sinnay
lives to fight another day.
Speaker 2 (00:56):
What was the vibe at the meeting? Did you get
the feeling that people were reluctantly on board with us
or you know, pretty enthusiastic.
Speaker 3 (01:04):
I think that summarizes it well. I think the word
reluctantly on board makes thatsolute sense. I mean, certainly we
heard a range of us previously in the lead up
to the meeting in terms of some shareholders who wanted
to contribute to maintain their pro rata holding to avoid
that dilution that you mentioned in your intro. Others were
quite happy that the Bright was coming to the rescue,
(01:24):
and I think most shareholders, myself included, would recognize and
acknowledge the support, the immense support that Bright has provided
to the company.
Speaker 2 (01:33):
Are you convinced that the plan is going to work?
Speaker 3 (01:37):
Well, I guess there's things you do when you're desperate,
and that Sinlay was certainly in a very distressed state,
and that the most urgent priority was to make sure
that the company could actually restructure its balance sheet, that
it was in a position to repay its debt, to
meet the demands of its banking syndicates and so on.
So look, that's got to be the first priority. And
(01:57):
if you can survive today, you can always live to
fight tomorrow, and that now becomes the next set of priority.
So it's gone from extremely distressed to now now they're
just stressed, but they'll have to take the company will
have to focus really hard and it's operating performance over
the coming twelve months, they'd have to focus really hard
(02:18):
on the activities that sought out. It's operating issues, particularly
in the North Island. Now they've taken steps to do that,
but there's a long way to go, so you know
all the rest of them.
Speaker 2 (02:27):
Yeah, are they going to be able to convince the
farmers to stick it out with them?
Speaker 3 (02:31):
That's and that was discussed today and actually the chair
did go into some detail around some of those initiatives
that they're undertaking. Yes, the North Island Strategic Review is
really important to them. The farmers in the South Island
that supply the Dune Sandal facility really important to them.
There will be a lot of focus the company has
placed will place in those key supplier relationships. So I've
(02:54):
got no doubt that the work will already have begun
on that and it needs to continue. So the company
still was carrying, as you say, some significant operating risks
going forward, and the proof and the pudding will be
over what happens in the next twelve months. There's a
marker on the way they've got in less than a
month's time. They will be a couple of weeks time
(03:14):
they'll be announcing their financial results for the previous financial year,
and no doubt at that point will be a bit
a bit of an update as well.
Speaker 2 (03:21):
Wasn't you who asked at the meeting today whether they
might need another bail out, another equality raise in a year.
Speaker 3 (03:26):
It was the answer, I think yes, but and a
look that the company did respond really clearly on that,
and he George Adams' comment quite appropriately was that they
have to earn their strips before they come back to
the market. In other words, they've got to have some
proof on the board that they have actually delivered something
and that that is a reasonable answer, and that the
(03:49):
key that what was behind my question was signaling that firstly,
that that operating performance over the next twelve months is
absolutely critical for them to be able to still cope
with what is a significant level of debt that they have.
They've just refinanced their banking syndicate with a four hundred
and fifty million dollars that's still a lot of money,
(04:11):
so they are still reliant on a good performance over
the coming twelve months. And look, George Adams did acknowledge
that as well, so it was a very clear answer.
But it's not imminent. They're not going to come to
the market tomorrow and want more capital, but they do need.
They still have a lot of work to do to
make sure the company can operate well. There are still
inherent risks that they need to deal with.
Speaker 2 (04:31):
Olive, it always good to talk to you. I really
appreciate your time. That's Olive Amanda, New Zealand Shareholders Association.
Speaker 1 (04:36):
For more from news talks b listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on Iartradio
You're listening to a podcast from Newstalks'd be follow this
and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Sinley was thrown a bit of a lifeline today, but
it is going to have to massively lift its game
if it wants to avoid another bailout in the near future.
The shareholders voted in favor of a two hundred and
eighteen million dollar equity raise. Bright Dairy obviously contributed the
Lion's share It's now got sixty five percent of Sinley
and a two put in about thirty three million bucks
and keeps its almost twenty percent stake. Olive Amander from
(00:37):
the Shareholders Association was at the meeting this morning.
Speaker 3 (00:39):
Is with us? Now, hey, Oliver, good evening.
Speaker 2 (00:42):
HA tough on the minority shareholders, say, very tough on.
Speaker 3 (00:46):
The minority shareholders. I mean, look for minorities. This really
is a bit of a dead rat. But they've swallowed
that dead rat today. They've taken the medicine and Sinnay
lives to fight another day.
Speaker 2 (00:56):
What was the vibe at the meeting? Did you get
the feeling that people were reluctantly on board with us
or you know, pretty enthusiastic.
Speaker 3 (01:04):
I think that summarizes it well. I think the word
reluctantly on board makes thatsolute sense. I mean, certainly we
heard a range of us previously in the lead up
to the meeting in terms of some shareholders who wanted
to contribute to maintain their pro rata holding to avoid
that dilution that you mentioned in your intro. Others were
quite happy that the Bright was coming to the rescue,
(01:24):
and I think most shareholders, myself included, would recognize and
acknowledge the support, the immense support that Bright has provided
to the company.
Speaker 2 (01:33):
Are you convinced that the plan is going to work?
Speaker 3 (01:37):
Well, I guess there's things you do when you're desperate,
and that Sinlay was certainly in a very distressed state,
and that the most urgent priority was to make sure
that the company could actually restructure its balance sheet, that
it was in a position to repay its debt, to
meet the demands of its banking syndicates and so on.
So look, that's got to be the first priority. And
(01:57):
if you can survive today, you can always live to
fight tomorrow, and that now becomes the next set of priority.
So it's gone from extremely distressed to now now they're
just stressed, but they'll have to take the company will
have to focus really hard and it's operating performance over
the coming twelve months, they'd have to focus really hard
(02:18):
on the activities that sought out. It's operating issues, particularly
in the North Island. Now they've taken steps to do that,
but there's a long way to go, so you know
all the rest of them.
Speaker 2 (02:27):
Yeah, are they going to be able to convince the
farmers to stick it out with them?
Speaker 3 (02:31):
That's and that was discussed today and actually the chair
did go into some detail around some of those initiatives
that they're undertaking. Yes, the North Island Strategic Review is
really important to them. The farmers in the South Island
that supply the Dune Sandal facility really important to them.
There will be a lot of focus the company has
placed will place in those key supplier relationships. So I've
(02:54):
got no doubt that the work will already have begun
on that and it needs to continue. So the company
still was carrying, as you say, some significant operating risks
going forward, and the proof and the pudding will be
over what happens in the next twelve months. There's a
marker on the way they've got in less than a
month's time. They will be a couple of weeks time
(03:14):
they'll be announcing their financial results for the previous financial year,
and no doubt at that point will be a bit
a bit of an update as well.
Speaker 2 (03:21):
Wasn't you who asked at the meeting today whether they
might need another bail out, another equality raise in a year.
Speaker 3 (03:26):
It was the answer, I think yes, but and a
look that the company did respond really clearly on that,
and he George Adams' comment quite appropriately was that they
have to earn their strips before they come back to
the market. In other words, they've got to have some
proof on the board that they have actually delivered something
and that that is a reasonable answer, and that the
(03:49):
key that what was behind my question was signaling that firstly,
that that operating performance over the next twelve months is
absolutely critical for them to be able to still cope
with what is a significant level of debt that they have.
They've just refinanced their banking syndicate with a four hundred
and fifty million dollars that's still a lot of money,
(04:11):
so they are still reliant on a good performance over
the coming twelve months. And look, George Adams did acknowledge
that as well, so it was a very clear answer.
But it's not imminent. They're not going to come to
the market tomorrow and want more capital, but they do need.
They still have a lot of work to do to
make sure the company can operate well. There are still
inherent risks that they need to deal with.
Speaker 2 (04:31):
Olive, it always good to talk to you. I really
appreciate your time. That's Olive Amanda, New Zealand Shareholders Association.
Speaker 1 (04:36):
For more from news talks b listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on Iartradio
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