SML - Synlait Milk Ltd

[Toddy]

Will they ? So who is left digging repeated holes in their front garden for CR after CR ?

Any news on a future dividend out of this or do the Chinese lenders get first lick of the lollypop right up the top of the queue .. or maybe better dodging the mayhem ahead in future rounds of craziness .. by simply leaving funds in the bank on high interest ?

Farmers will win for sure.
Chinese will win.
A2, secure short term product.

Retail investors need to find big $$$ to keep the faith.

I ways wonder where Kiwi mum and dad's are getting this money from. It's no IFT cap raise for sure. This is a rescue package, think RYM, FBU etc

[Snoopy]

I was also very impressed with the Chairs performance.

Four legs at the start of the performance and four legs at the end. Not bad, although in fairness that kind of performance is expected these days. What about the person who was sitting in the chair? How did he do?

SNOOPY

[Balance]

Farmers will win for sure.
Chinese will win.
A2, secure short term product.

Retail investors need to find big $$$ to keep the faith.

I ways wonder where Kiwi mum and dad's are getting this money from. It's no IFT cap raise for sure. This is a rescue package, think RYM, FBU etc

Synlait will go on from here to recover and prosper - that is my belief.

Covid dealt a very cruel blow to any number of companies and sadly, some did not survived.

Think of the number of NZ companies which needed to do CR in the last 3 years to survive. And how they have gone on to recover and do well.

Synlait is going to survive - it is fortunate to have a major shareholder with deep pockets, commitment and distribution in a huge market in China which wants dairy products from NZ.

[nztx]

Synlait will go on from here to recover and prosper - that is my belief.

Covid dealt a very cruel blow to any number of companies and sadly, some did not survived.

Think of the number of NZ companies which needed to do CR in the last 3 years to survive. And how they have gone on to recover and do well.

Synlait is going to survive - it is fortunate to have a major shareholder with deep pockets, commitment and distribution in a huge market in China which wants dairy products from NZ.

Another A2M upwards trajectory .. headed off in direction of a big 20 .. or maybe not so soon ?

[RupertBear]

Four legs at the start of the performance and four legs at the end. Not bad, although in fairness that kind of performance is expected these days. What about the person who was sitting in the chair? How did he do?

SNOOPY

Ok it took me a while Snoopy but I finally got it!

So to be more precise, I thought George Adams, the man in the chair, was excellent.

[Balance]

Ok it took me a while Snoopy but I finally got it!

So to be more precise, I thought George Adams, the man in the chair, was excellent.

Agreed. Given that the approval was in the bag (proxy votes), I thought he was patient, frank and as forthcoming as could be with all the questions throw at him. Best in mind that he is new as chairman but comes across as very well briefed.

One hopes that Synlait will achieve the cashflow positive outcome in 2025 he alerted to.

[Toddy]

Forbar say RYM 300 percent returns. Makes you think, puting even MORE money in to Synlait would probably be a slow painful wait to earn a decent return on your capital.

I understand that this waiting game on the outcome of this rescue package has been fun for many. But the opportunity cost of reinventing will be massive in this downward interest rate environment. The fund managers will find it a hard sell to the story to invest more funds to the big boss.

[Balance]

Forbar say RYM 300 percent returns. Makes you think, puting even MORE money in to Synlait would probably be a slow painful wait to earn a decent return on your capital.

I understand that this waiting game on the outcome of this rescue package has been fun for many. But the opportunity cost of reinventing will be massive in this downward interest rate environment. The fund managers will find it a hard sell to the story to invest more funds to the big boss.

The issue with Synlait going forward is not whether its fortunes will recover - it will imo. The factors which brought this company close to receivership (but for Bright) are now well known and imo, reversible.

The big issue for me is whether the interests of minorities are in synch with that of Bright who is expected to increase its shareholding beyond its current level. Bright controlling Synlait at an operational level raises the all important question of where Synlait’s future profits exporting to the huge China market will reside - in NZ or in China via ‘transfer pricing’.

Bright is not rescuing Synlait for free!

So shareholders and potential investors need to watch that carefully before putting in more funds via the CR.

Different for those who are currently not invested - as can be seen in recent times, brave & shrewd investors like ssb888 can double their monies by buying off the panic-stricken investors.

[bull....]

Adams said the company could now get on with a capital raising through the sale of new shares, which was likely to be "several hundred million dollars" but would avoid the need to sell assets. Details would be released next month, but the matter was complicated and needed to be fair to all.
"We have a complex relationship with two major shareholders, which we've got to resolve to ensure we can deliver an equity raise ... we've also got to take into account the volatility of our share price and bond price."

https://www.rnz.co.nz/news/business/...or-shareholder

[silverblizzard888]

In my view Bright probably sees their investment in Synlait as a means of growing their business into foreign markets that would otherwise be harder to enter themselves, so they would to that extent never really want to fully own Synlait as theres benefits for it to remain NZX listed and to maintain local shareholders. Hence why they have backed Synlait even though they never fully utilised Synlait for their benefit, though they are now working on a new product together that will see Synlait potentially producing a lot more product for them.

Synlait has always been a growth aspired company hence why maintaining Pokeno was so important to them even though it has nearly taken them under. If they make it through this with a successful capital raising they become a whole lot stronger and have a lot of potential to become a much better company than they have been in the past. I like the stance of the new Chair, he seems to have all four feet on the ground (pun intended), a more traditional finance guy who doesn't run before he walks and the perfect guy to help reset the A2 relationship.