SML - Synlait Milk Ltd

[Ggcc]

Theres a few scenarios that could go wrong if A2 decides to play with fire:
1. If they upset Bright they may use their political capital to have the SAMR revoked or not renewed in the future
2. If a big player with market share in China's infant formula wanted to deal a deadly blow to A2's market share in China they would take Dunsandel, theres big companies with much deeper pockets than A2 out there. Even Abbott may take an interest since Synlait is approved to produce infant formula for them in the US.
3. Bright might end up with Dunsandel since it values those assets quite highly

If the price is right, A2 could opt to Capital raise money to include to the war chest they already own to buy SML. A2M have not released anything after this announcement by SML, letting me believe negotiations are still ongoing with Bright and SML to come to a common agreement. I feel we are underestimating A2M management and their business partners.

[Snoopy]

A change in SML’s ownership will also trigger a review of the SAMR.

Good point. But which Synlait owns the SAMR? According to the NZ company register, there are four active Synlaits currently trading:

1/ Synlait Milk Dunsandel Farms Limited (incorporated 25 May 2022) owned 100% by Synlait Milk Limited.
2/ Synlait Milk (Holdings) No. 1 Limited (incorporated 9 Aug 2020) owned 100% by Synlait Milk Limited.
3/ Synlait Milk Finance Limited (incorporated 14 June 2013) owned 100% by Synlait Milk Limited.
4/ Synlait Milk Limited (incorporated 2 March 2005)

What say you put the parent Synlait Milk Company into receivership, crippled by debt. But the subsidiary that owned the milk licence SAMR was not put into receivership, because it was still trading profitably. Thus you could keep the SAMR out of the receivership process, avoiding the need for any reapplication and re-approval of the licence, while the ownership of the parent is sorted out?

SNOOPY

[silverblizzard888]

If the price is right, A2 could opt to Capital raise money to include to the war chest they already own to buy SML. A2M have not released anything after this announcement by SML, letting me believe negotiations are still ongoing with Bright and SML to come to a common agreement. I feel we are underestimating A2M management and their business partners.

Yes you are right we can't underestimate A2 either, they are the ones with the 'brains' after all. Synlait was just the muscle haha.
Potentially if A2 doesn't participate in the capital raise they would probably want to be assured by Bright that their supply chain is still safe just as leverage before voting to approve the loan.

[aperitif]

They want a2's money and are still in an arbitration process with them re "exclusive supply rights" hahahaha

[Balance]

Good point. But which Synlait owns the SAMR? According to the NZ company register, there are four active Synlaits currently trading:

1/ Synlait Milk Dunsandel Farms Limited (incorporated 25 May 2022) owned 100% by Synlait Milk Limited.
2/ Synlait Milk (Holdings) No. 1 Limited (incorporated 9 Aug 2020) owned 100% by Synlait Milk Limited.
3/ Synlait Milk Finance Limited (incorporated 14 June 2013) owned 100% by Synlait Milk Limited.
4/ Synlait Milk Limited (incorporated 2 March 2005)

What say you put the parent Synlait Milk Company into receivership, crippled by debt. But the subsidiary that owned the milk licence SAMR was not put into receivership, because it was still trading profitably. Thus you could keep the SAMR out of the receivership process, avoiding the need for any reapplication and re-approval of the licence, while the ownership of the parent is sorted out?

SNOOPY

Certainly possibilities but is it worth the risk of pulling the tail of the dragon?

Dealing with China here.

There is no appeal process unlike our judicial system here!

[winner69]

Sometimes doing nothing is a good strategy …like opting out and saying nothing

A2 might not bother go to the meeting or even vote

That would be fun

[Balance]

Sometimes doing nothing is a good strategy …like opting out and saying nothing

A2 might not bother go to the meeting or even vote

That would be fun

Surely A2 has too much at stake not to make any comment or commitment, one way or the other?

[Bikeguy]

Theres a few scenarios that could go wrong if A2 decides to play with fire:
1. If they upset Bright they may use their political capital to have the SAMR revoked or not renewed in the future
2. If a big player with market share in China's infant formula wanted to deal a deadly blow to A2's market share in China they would take Dunsandel, theres big companies with much deeper pockets than A2 out there. Even Abbott may take an interest since Synlait is approved to produce infant formula for them in the US.
3. Bright might end up with Dunsandel since it values those assets quite highly

Agreed, A2 could end up with a tiger by the tail with Bright if theres to much blood on the floor…
At the end of the day these statements today to the market show Bright are pretty committed to keeping SML going…and they have very deep pockets.
Both of them together are a fantastic value proposition, I just hope the can put it all back together and move forward together again.

[billkiapi]

Good point. But which Synlait owns the SAMR? According to the NZ company register, there are four active Synlaits currently trading:

1/ Synlait Milk Dunsandel Farms Limited (incorporated 25 May 2022) owned 100% by Synlait Milk Limited.
2/ Synlait Milk (Holdings) No. 1 Limited (incorporated 9 Aug 2020) owned 100% by Synlait Milk Limited.
3/ Synlait Milk Finance Limited (incorporated 14 June 2013) owned 100% by Synlait Milk Limited.
4/ Synlait Milk Limited (incorporated 2 March 2005)

What say you put the parent Synlait Milk Company into receivership, crippled by debt. But the subsidiary that owned the milk licence SAMR was not put into receivership, because it was still trading profitably. Thus you could keep the SAMR out of the receivership process, avoiding the need for any reapplication and re-approval of the licence, while the ownership of the parent is sorted out?

SNOOPY

definately Synlait Milk owns Dunsandel
and the GB reg/SAMR attaches to the site not the company

[billkiapi]

Can’t assume anything at this stage- Dunsandel value significantly impacted without A2M volume with a lot of raw material and nowhere to go. A2M have options to make and dry. Much of Brights support is to ensure they turn a 130M unsecured underwrite into a secured loan. Receivership means the bank asks for 130M from Bright if Synlait drops, and Bright have zero security for that.