SML - Synlait Milk Ltd

[Balance]

Last heavily dilutary CR was Sky TV way back in 2020.

Sp was 33c when the 2.83 :1 rights issue at 12c per share to raise $157m was announced vs market cap at the time of $144m.

Theoretical ex-rights price was 17.5c.

SP traded as low as 15c during the CR trading period.

SML's CR is going to be a biggie - call it 4:1 at 25c to raise $200m.

Ex-rights price (based upon yesterday's closing sp of 36.5c) would be 27.3c.

So expect the sp to drift below that during the rights trading period?

[Newman]

Synlait has 218.5 m shares. If it raises $1 from each existing share to get net proceeds of approximately $200 m, this would translate to 4 new shares at $0.25 each in capital raise.

[bull....]

OK im all in for the mighty sum of $200 today

nearly up 100% now as they said at meeting may need several 100 m in raise and as my calc's suggested on this thread that fits in with there forecast ebitda forward. anyway the higher the price goes higher the cap raising price should be.

[blackcap]

nearly up 100% now as they said at meeting may need several 100 m in raise and as my calc's suggested on this thread that fits in with there forecast ebitda forward. anyway the higher the price goes higher the cap raising price should be.

Yep, if this upwards trajectory continues, they might be able to get away with a 3 for 1, rather than a 4 or 5 for 1.

I see my bonds are now in the money, bought them at 17%, now trading at 40% but I have a capital gain. Mathematical quirks at play.

[Balance]

Yep, if this upwards trajectory continues, they might be able to get away with a 3 for 1, rather than a 4 or 5 for 1.

I see my bonds are now in the money, bought them at 17%, now trading at 40% but I have a capital gain. Mathematical quirks at play.

Only 4 months left to maturity for the bonds.

Actually less as bond holders can require early redemption in the event of any change in Bright’s shareholding.

What an outstanding investment the bonds were when the panicked stricken holders were dumping them at 100%+ interest rates.

There was NEVER any possibility that Synlait would be allowed to go broke. And even if it did, there was plenty of asset base to realise to pay back the bonds.

[Goob]

Today was one of the biggest moves in the bonds, now up at 91c. Does anyone know what came out of the A2 Milk result today that was bullish for SML?

[Newman]

Today was one of the biggest moves in the bonds, now up at 91c. Does anyone know what came out of the A2 Milk result today that was bullish for SML?

1). The capital raise is almost certain after Synlait announced its dispute with A2M was solved; thus, bonds will be paid back. Even at 38% annual return, it is best available on the bond market.

2) A2M full-year results demonstrate its IFM business in China was solid, which totally relies on Synlait to continue.

[blackcap]

There was NEVER any possibility that Synlait would be allowed to go broke. And even if it did, there was plenty of asset base to realise to pay back the bonds.

That was my basis for purchasing the bonds.

[Goob]

1). The capital raise is almost certain after Synlait announced its dispute with A2M was solved; thus, bonds will be paid back. Even at 38% annual return, it is best available on the bond market.

2) A2M full-year results demonstrate its IFM business in China was solid, which totally relies on Synlait to continue.

I'm interested in what moved the bonds today, so the first point would've already been in the price... I suppose it was your 2nd point then. To go from 0.78 to 0.91 on that news in a day seems like a lot — so was wondering if perhaps A2 said something more specific re. Synlait.