Synlait shares lift on debt refinancing deal
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More news: Shares in Synlait Milk are up 2.5% to 41 cents after the embattled New Zealand dairy producer secured a new NZ$450 million ($414 million) bank debt refinancing deal ahead of a shareholder meeting on its recapitalisation plan on Wednesday.
The deal, with the implementation subject to several conditions, includes receipt of equity raise proceeds, its A2 Milk settlement becoming unconditional, as well as other financing covenants.
Synlait secures bank deal ahead of crucial shareholder vote
The news: Embattled New Zealand dairy producer Synlait Milk has secured a new bank debt deal ahead of a shareholder meeting on its recapitalisation plan this week.
The numbers: The NZX and ASX-listed Synlait has secured a NZD450 million ($414 million) bank debt in a refinancing of its banking facilities with a new banking syndicate that includes ANZ, Bank of China, Bank of Communications, China Construction Bank, HSBC, Industrial and Commercial Bank of China, Kiwibank, and Rabobank.
The deal includes a working capital facility with a peak of NZD160 million, a revolving credit facility of NZD205 million, and a term loan facility of NZD75 million.
Synlait said it also has NZD180 million of five-year unsecured subordinated fixed-rate bonds quoted on the NZX debt market.
The context: Synlait said the implementation of the refinancing is subject to several conditions, including receipt of equity raise proceeds, its A2 Milk settlement becoming unconditional as well as other financing covenants.
The group said it is working to satisfy these conditions on 1 October, concurrently with completion of the equity raise. Chief executive Grant Watson said the new bank refinancing is another positive step forward in Synlait’s business recovery plan and actions to deleverage the company.
The refinancing comes just weeks after Synlait settled a long running dispute with top customer and 20% shareholder A2 Milk over exclusive supply rights for infant milk formula products sold in China, Australia and New Zealand. The company reported a hefty first-half loss and warned of material uncertainties after heavy writedowns amid a slow recovery in business performance. It has also been looking to raise equity and speed up the sale of its underperforming assets.
The source: ASX announcement
