SML - Synlait Milk Ltd

[Balance]

That is the number one question I have. Part of the reason is, I have heard that the Pokeno site can't find the supplies of milk farmers. They don't want to switch to Synlait. Maybe there might be more interest if Synlait's books look better.

Synlait’s problems have been the talk of the Waikato district for ages. The problems with the plant is well known.

Opportunity for a new start beckons!

[whatsup]

Synlait’s problems have been the talk of the Waikato district for ages. The problems with the plant is well known.

Opportunity for a new start beckons!

farmers being a ultra conservative lot this question needs to be answered , it wont go away and SML's future hangs on it does not matter how much lippy they put on the SML pig !!

[Rawz]

There are so many in-depth posts coming through, ( both for and against) this is a good site, thanks for the efforts guys,

yes agree, good posts.

still im perplexed yet again by such investment interest in a flea ridden mutt of a stock.

Reminds me of a few months ago when i pointed out FBU vs TWR post results chat. One was dismal with downgrades (FBU) and one excellent with profit upgrades (TWR). FBU had pages and pages of posts vs TWR barely anything.

SML is a very high-risk proposition imo. Many assumptions being thrown around, all could be true, all could be wrong.

[Rawz]

If i was going to have a punt on the SML horse i would wait for:

1) Cap raise terms and amount to see post raise debt position
2) Pokeno sale or whether SML retain it and can magically find a customer to meet it's capacity (noting that they have been looking for a long time and its major shareholder hasnt been able to help with opening doors in the largest consumer market in the world)

tick off these two points and the downside risk is substantially lower. yes may miss some gains but better to make less sometimes

[Bikeguy]

If i was going to have a punt on the SML horse i would wait for:

1) Cap raise terms and amount to see post raise debt position
2) Pokeno sale or whether SML retain can magically find a customer to meet it's capacity (noting that they have been looking for a long time and its major shareholder hasnt been able to help with opening doors in the largest consumer market in the world)

tick off these two points and the downside risk is substantially lower. yes may miss some gains but better to make less sometimes

I feel Rawz assessment is right

[Balance]

If i was going to have a punt on the SML horse i would wait for:

1) Cap raise terms and amount to see post raise debt position
2) Pokeno sale or whether SML retain can magically find a customer to meet it's capacity (noting that they have been looking for a long time and its major shareholder hasnt been able to help with opening doors in the largest consumer market in the world)

tick off these two points and the downside risk is substantially lower. yes may miss some gains but better to make less sometimes

Sb888 bought at 20c and that’s a 20% gain in a week - it’s all about one’s risk tolerance.

And some investors have already made 60% to 80% already on their bonds by buying off the panicked striken holders who sold at 180%+ interest rates.

Question of how much downside is priced into the stock already when sp is less than 10% of NAB!

But I am with you about waiting for the CR before deciding whether to play SML.

As for flea-ridden mutt - I recall Diligent at 12c being described worse and what happened? It became a 70 bagger!

[silverblizzard888]

yes agree, good posts.

still im perplexed yet again by such investment interest in a flea ridden mutt of a stock.

Reminds me of a few months ago when i pointed out FBU vs TWR post results chat. One was dismal with downgrades (FBU) and one excellent with profit upgrades (TWR). FBU had pages and pages of posts vs TWR barely anything.

SML is a very high-risk proposition imo. Many assumptions being thrown around, all could be true, all could be wrong.

The main reason some investors tend to overlook insurance stocks like TWR comes in 2 reasons, first one is that the history of CBL was once worth $750m on the NZX and went into liquidation leaving a bad taste in investors mouths, and the other is that a potential of big disasters happening and poorly priced premiums could absolutely wipe the company out. Companies like Fletcher and Synlait if run well have the ability to be run consistently and provide greater certainty, which is the name of the game, companies with certainty are always valued more highly. TWR could perform really well this year and their big event funding be unutilized, but year after that some big event happens and theres none left, so that uncertainty becomes harder for a longer term investor to value.

Fully agree with your other post, Synlaits future is very contingent on CR and Pokeno outcome so its a fair asssessment if its an opportunity worth taking the risk over. In other cases the risk is very high for a company in this situation, but for me I feel like Bright lowers the risk substantially that isn't valued by the market.

[Goob]

Bonds rallied from 50c to 78c within two weeks. Someone's buying at any price they can get.

Surprised the equity hasn't had the same pattern. Think the odds of an inside information leak here are very high.

[Sideshow Bob]

https://www.nzx.com/announcements/433862

ynlait Milk Limited (Synlait) confirms that it has agreed and entered into documentation with its bank lenders to implement the amendments and waivers to its banking facilities as signalled in the Synlait notice of meeting dated 25 June 2024.

As previously communicated, Synlait requested waivers for its leverage ratios and interest coverage ratio for 31 July 2024 and a deferral of the maturity/limit step-downs for June and July 2024, until such time that Synlait’s planned equity raise is completed (see the notice of meeting for further details).

The approval is subject to the addition of a covenant to achieve a minimum adjusted EBITDA for FY24 of $45 million.

For more information contact:

[Lego_Man]

Bonds rallied from 50c to 78c within two weeks. Someone's buying at any price they can get.

Surprised the equity hasn't had the same pattern. Think the odds of an inside information leak here are very high.

One of these weird, almost unique situations where the logical expression of the "survival" trade was/is to buy the bonds. Simply due to the massive equity infusion required to keep the company alive and the uncertainty surrounding that.