Synlait shares rise as shareholders support recapitalisation plan
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More news: Synlait shares climbed after the New Zealand dairy producer secured backing from the vast majority of shareholder proxies for its recapitalisation plan.
Shares were up 1.2% to 41 cents by 11:30am AEST. However, its shares fluctuated over 3% in both directions at the start of trading.
Synlait secures shareholder support for recapitalisation plan
The news: Embattled New Zealand dairy producer Synlait Milk has secured backing from an overwhelming majority of shareholder votes for its recapitalisation plan.
The numbers: The NZX and ASX-listed Synlait plans to raise NZD217.8 million ($199.4 million) by issuing new shares to its top two shareholders — China’s Bright Dairy and A2 Milk. While A2 Milk will be issued shares at 43 cents each, Bright Dairy will be issued shares at 60 cents each.
Synlait shares last traded at 40 cents on the ASX and are down 53% so far this year.
The group’s presentation to shareholders at the meeting showed it had secured support for the placement from more than 90% of proxies eligible to vote.
The context: The shareholder backing for the placement comes just days after Synlait tied up a NZD450 million ($414 million) refinancing of its bank debt with a new banking syndicate as it works to deleverage the company and turnaround the business.
In July, Synlait withdrew its full-year guidance citing continuing uncertainty about the impact of higher than expected costs.
Earlier this month, it 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 and has also been looking to speed up the sale of its underperforming assets.
The source: ASX announcement
