July 11, 2024 • 5 mins
Embattled dairy company Synlait Milk has got the backing of its shareholders for a large loan that has secured its near term survival.
Its minority shareholders voted overwhelmingly at a special meeting in favor of a $130 million loan from its Chinese major shareholder, Bright Dairy, to allow it to repay loans to its banks due on Monday.
Final voting figures showed 99.6 percent backing for the loan arrangement, which runs for 12 months with an 8 percent interest rate.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Country Sport Breakfast with Brian Kelly on gold Sport.
It's a quarter to eight here on the Country Small
Breakfast on gold Sport. We'll take you to Wimbledon after
eight o'clock this morning and catch up with our Wimbledon
reporter Craig Gabriel. But right now we are taking you
to Chicago and out of high Ground Dairy in Chicago.
Dairy manager Stud Davidson joined this morning shop.
Speaker 2 (00:23):
Good morning, how are you getting on very well?
Speaker 1 (00:25):
Thank you for Chicago's weather today.
Speaker 2 (00:28):
Oh it's come sunny today. We had a couple of
days of wet weather, but it's come right so noon,
so just in time for the weekend.
Speaker 1 (00:35):
All right. So we want to touch on the big
news here in New Zealand yesterday and I guess it
would have a flow on effect for you as well.
Sin Late Milk has been thrown a lifeline from its
largest shareholders, so they live to tell another day.
Speaker 2 (00:49):
Yeah, they've got through this one. Shareholders are backing them
as well. So Bright's Bright Dairy there in China, you know,
pushing through the line of one hundred and eighty million
dollars and has been approved for the shareholders quite lifeline
in the current situation, and you know, a good sort
of outlook for Sinlay going for chance to sort themselves
out and continue on their path.
Speaker 1 (01:09):
Were you surprised that that was the result.
Speaker 2 (01:13):
Yeah, we were a little bit, especially with A two
coming out the morning of the vote and announcing to
the market that they would support the vote, because that
was the concern for the market, was that a two milk,
you know, obviously a nineteen percent shareholder within Sinlay themselves,
they might have been potentially looking to do something different
within that vote, So there was a lot of uncertainty
were in the vote and what it meant from the
(01:35):
second biggest shareholder, but their announcement early in the morning
really gave the shareholder some support. Not to mention that
shareholders that voted by proxy prior to the shareholding vote
on the day had actually already pretty strongly supported the changes.
We know the support process, So it was pretty impressive
to see everyone come together and basically all agree that
this was the way forward.
Speaker 1 (01:55):
Yeah, one hundred and thirty million dollar loan from his
biggest shareholder, that's right. What does that now mean?
Speaker 2 (02:03):
Well, that means in one sense, it's kind of shuffling
the cheers on the Titanic to a point, it's it's
basically loan money going to pay off another loan, which
is sort of good. It changes the dynamics of that loan.
But the next step for Cinlay is a capital raise,
and this is that's the one hundred and eighty million dollars
referenced earlier. You know, they're looking to do an equity raise.
They've got a deleverage repayment of one hundred and eighty
(02:26):
million dollar bond, a bond they've got on the instex market,
and they're looking to get rid of that leverage and
change the position they're in. So that's sort of the plan,
is to move the debt around and potentially that takes
them to a better position than just rearranging the cheers
on the Titanic.
Speaker 1 (02:41):
And Bright Dairy. They couldn't cast a vote, could they
under inst rules?
Speaker 2 (02:47):
Correct? Yeah, they couldn't cast a vote, and especially because
they're the ones supplying the money, it's not exactly the ideal.
Speaker 1 (02:52):
So no, so looking positive, do you think then for sin.
Speaker 2 (02:57):
Late, Well, I think that you know, they've got a
big sort of vote of confidence now and the board,
especially the new chair. You know, I've got a very
big goal in front of them to sort out in
a long time, to get back to profitability and you know,
get rid of a lot of their debt and get
into a new strategic position. You know, they've got their
voted confidence, they've got the support they need now, They've
(03:18):
got everyone on board and on side, and it looks
like a real turn in terms of downlook for Sinlay,
which is good. The scary thing for Sinlay now is
that they have convinced their shareholders. They also now need
to convince their suppliers to stay with them as well.
So that's the next sort of hurdle for the team
to do. But again, hopefully that confidence from everyone back
in them or invested in them, you create some support
(03:41):
from their farmers as well.
Speaker 1 (03:42):
And it's changing a directionally. We've got a global dairy
trade auction coming up next week too, haven't we.
Speaker 2 (03:48):
Yes, we do. We've got one next Tuesday my time,
and things at this point in time aren't looking as
bad as the previous one. But I wouldn't say they're
looking rosy either.
Speaker 1 (03:57):
All right, we'll wait and see what happens there. And
I believe the other day in Chicago. You made it
to Michigan Avenue to watch Shane van Gisberg and compete
in the Exfinity NASCAR race.
Speaker 2 (04:08):
That's right. I was there on the sidelines watching them
lap around and you know, making us all very proud.
It was an incredible day sunshine in Chicago and the
loud NASCAR is lapping around the beautiful Grant Park. It
was quite a spectacle and nothing better than being a
Kiwi in Chicago watching another Kiwi dominate on the streets.
It was a great event, to be honest.
Speaker 1 (04:27):
You had a sunny day on the Saturday, but I
think the Sunday, whatever day was, it poured with rain
and affected the race, didn't it.
Speaker 2 (04:33):
I tell you Sunday was a day to watch it
from inside, and that's what I did, so I was
pretty happy with that decision. Saturday was the right day
to go along.
Speaker 1 (04:40):
It's pretty amazing and they shut down Michigan Avenue over
there for that race. Does that have much of an
effect on a city like Chicago?
Speaker 2 (04:47):
The locals hate it to put it monthly for a
city that's it's not as bad as New York. You know,
New York has a Statt's average pace through New York
it's five miles per hour. You better to walk. But
Chicago it is not exactly the traffic mecha either, so
traffic's usually already bad. And when they close down Michigan
AV and then also Lakefront Drive, which is two very
(05:08):
important routes through the city, it doesn't do a lot
for traffic. So I know the locals weren't fans, but
they do it reasonably well. They obviously leave parts of
those roads open while they sit in the track up
and just close them off right before the race. So
they do it reasonably well. But again, even two days
and of no roads or no road access in a
city the size of Chicago, it's not exactly ideal.
Speaker 1 (05:29):
Like shutting down Queen Street and Key Street and Auckland
really isn't I couldn't see that happening exactly.
Speaker 2 (05:34):
Imagine the back row. It might be worth it that
if you've got supercars on the waterfront in Auckland. No
one ought to complain about that.
Speaker 1 (05:41):
Oh, I'm sure they'd wouldn't you about it? Mate? Hey,
good to catch up mate, Thanks for joining us this morning,
stew anytime
The Country Sport Breakfast with Brian Kelly on gold Sport.
It's a quarter to eight here on the Country Small
Breakfast on gold Sport. We'll take you to Wimbledon after
eight o'clock this morning and catch up with our Wimbledon
reporter Craig Gabriel. But right now we are taking you
to Chicago and out of high Ground Dairy in Chicago.
Dairy manager Stud Davidson joined this morning shop.
Speaker 2 (00:23):
Good morning, how are you getting on very well?
Speaker 1 (00:25):
Thank you for Chicago's weather today.
Speaker 2 (00:28):
Oh it's come sunny today. We had a couple of
days of wet weather, but it's come right so noon,
so just in time for the weekend.
Speaker 1 (00:35):
All right. So we want to touch on the big
news here in New Zealand yesterday and I guess it
would have a flow on effect for you as well.
Sin Late Milk has been thrown a lifeline from its
largest shareholders, so they live to tell another day.
Speaker 2 (00:49):
Yeah, they've got through this one. Shareholders are backing them
as well. So Bright's Bright Dairy there in China, you know,
pushing through the line of one hundred and eighty million
dollars and has been approved for the shareholders quite lifeline
in the current situation, and you know, a good sort
of outlook for Sinlay going for chance to sort themselves
out and continue on their path.
Speaker 1 (01:09):
Were you surprised that that was the result.
Speaker 2 (01:13):
Yeah, we were a little bit, especially with A two
coming out the morning of the vote and announcing to
the market that they would support the vote, because that
was the concern for the market, was that a two milk,
you know, obviously a nineteen percent shareholder within Sinlay themselves,
they might have been potentially looking to do something different
within that vote, So there was a lot of uncertainty
were in the vote and what it meant from the
(01:35):
second biggest shareholder, but their announcement early in the morning
really gave the shareholder some support. Not to mention that
shareholders that voted by proxy prior to the shareholding vote
on the day had actually already pretty strongly supported the changes.
We know the support process, So it was pretty impressive
to see everyone come together and basically all agree that
this was the way forward.
Speaker 1 (01:55):
Yeah, one hundred and thirty million dollar loan from his
biggest shareholder, that's right. What does that now mean?
Speaker 2 (02:03):
Well, that means in one sense, it's kind of shuffling
the cheers on the Titanic to a point, it's it's
basically loan money going to pay off another loan, which
is sort of good. It changes the dynamics of that loan.
But the next step for Cinlay is a capital raise,
and this is that's the one hundred and eighty million dollars
referenced earlier. You know, they're looking to do an equity raise.
They've got a deleverage repayment of one hundred and eighty
(02:26):
million dollar bond, a bond they've got on the instex market,
and they're looking to get rid of that leverage and
change the position they're in. So that's sort of the plan,
is to move the debt around and potentially that takes
them to a better position than just rearranging the cheers
on the Titanic.
Speaker 1 (02:41):
And Bright Dairy. They couldn't cast a vote, could they
under inst rules?
Speaker 2 (02:47):
Correct? Yeah, they couldn't cast a vote, and especially because
they're the ones supplying the money, it's not exactly the ideal.
Speaker 1 (02:52):
So no, so looking positive, do you think then for sin.
Speaker 2 (02:57):
Late, Well, I think that you know, they've got a
big sort of vote of confidence now and the board,
especially the new chair. You know, I've got a very
big goal in front of them to sort out in
a long time, to get back to profitability and you know,
get rid of a lot of their debt and get
into a new strategic position. You know, they've got their
voted confidence, they've got the support they need now, They've
(03:18):
got everyone on board and on side, and it looks
like a real turn in terms of downlook for Sinlay,
which is good. The scary thing for Sinlay now is
that they have convinced their shareholders. They also now need
to convince their suppliers to stay with them as well.
So that's the next sort of hurdle for the team
to do. But again, hopefully that confidence from everyone back
in them or invested in them, you create some support
(03:41):
from their farmers as well.
Speaker 1 (03:42):
And it's changing a directionally. We've got a global dairy
trade auction coming up next week too, haven't we.
Speaker 2 (03:48):
Yes, we do. We've got one next Tuesday my time,
and things at this point in time aren't looking as
bad as the previous one. But I wouldn't say they're
looking rosy either.
Speaker 1 (03:57):
All right, we'll wait and see what happens there. And
I believe the other day in Chicago. You made it
to Michigan Avenue to watch Shane van Gisberg and compete
in the Exfinity NASCAR race.
Speaker 2 (04:08):
That's right. I was there on the sidelines watching them
lap around and you know, making us all very proud.
It was an incredible day sunshine in Chicago and the
loud NASCAR is lapping around the beautiful Grant Park. It
was quite a spectacle and nothing better than being a
Kiwi in Chicago watching another Kiwi dominate on the streets.
It was a great event, to be honest.
Speaker 1 (04:27):
You had a sunny day on the Saturday, but I
think the Sunday, whatever day was, it poured with rain
and affected the race, didn't it.
Speaker 2 (04:33):
I tell you Sunday was a day to watch it
from inside, and that's what I did, so I was
pretty happy with that decision. Saturday was the right day
to go along.
Speaker 1 (04:40):
It's pretty amazing and they shut down Michigan Avenue over
there for that race. Does that have much of an
effect on a city like Chicago?
Speaker 2 (04:47):
The locals hate it to put it monthly for a
city that's it's not as bad as New York. You know,
New York has a Statt's average pace through New York
it's five miles per hour. You better to walk. But
Chicago it is not exactly the traffic mecha either, so
traffic's usually already bad. And when they close down Michigan
AV and then also Lakefront Drive, which is two very
(05:08):
important routes through the city, it doesn't do a lot
for traffic. So I know the locals weren't fans, but
they do it reasonably well. They obviously leave parts of
those roads open while they sit in the track up
and just close them off right before the race. So
they do it reasonably well. But again, even two days
and of no roads or no road access in a
city the size of Chicago, it's not exactly ideal.
Speaker 1 (05:29):
Like shutting down Queen Street and Key Street and Auckland
really isn't I couldn't see that happening exactly.
Speaker 2 (05:34):
Imagine the back row. It might be worth it that
if you've got supercars on the waterfront in Auckland. No
one ought to complain about that.
Speaker 1 (05:41):
Oh, I'm sure they'd wouldn't you about it? Mate? Hey,
good to catch up mate, Thanks for joining us this morning,
stew anytime
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