And SML intends to use that loan to pay its lenders? That how I am reading it?
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And SML intends to use that loan to pay its lenders? That how I am reading it?
Isn’t the fact that Bright is loaning SML 130 mil an indication of their intent? ie that they are not walking away?
And not selling Dairyworks at any cost seems pretty reasonable if you have a backer (Bright) that is willing to make loans to support SML…no fire sale needed?
'submitting a cessation notice
provides an option, rather than a clear intention to sign with other processors'
Hmmm. Unless they are offering a lot more dough up front why would any supplier stay?
Nobody would be fool enough to become an unsecured creditor?
Lending $130m to Synlait is a better choice among bad options. Bright cannot let Synlait go into receivership now because of its cumulative investment of $200m. If Synlait survives, Bright get paid interest on the loan or the loan be converted into shares at a discount; if Synlait collaps at a later stage, the loan ranks before bondholders and shareholders, and Bright could recover the loan at least partially.
Yes, Bright moving from an underwrite with no security to presumably a secured loan- if everyone, and I mean pretty much everyone, agrees. All to pay the 130M due on the extended date of July 15 (which was extended by banks because Bright underwrote as I understand it).
On 2 April, Synlait said
The Board has received a letter of support from Bright Dairy, the company’s largest shareholder, which owns 39.01% of the shares in Synlait, that reinforces its ongoing support for Synlait. The letter includes a commitment to participate in a future equity raise and to extend a loan at the request of Synlait, subject to Synlait and Bright receiving all necessary approvals.
Paywalled, but apparently Bright Diary are up for the cap raise if required, on top of the $130m loan. https://businessdesk.co.nz/article/m...areholder-loan
The 'supplier exodus' is a bit overdone imo, because the actual exit (option) has a two year lead time.
So if Balance is getting 100% of his money back from these bonds as he has assured us, then there must be one hell of an opportunity in them right now.
He by definition must have multiples of his net worth invested in these bonds by now.
Free money.