Synlait CEO Resignation Highlights Deeper Challenges Facing Dairy Processor
A revolving door of chief executives at milk processor Synlait is a warning sign, says Lincon University senior lecturer in agribusiness Nic Lees.
The final size of the secondary sell-down will be determined as part of the bookbuild process and will likely vary depending on the price achieved. On completion of the offer, Synlait Milk will list on the NZX Main Board under the stock code 'SML'.
The indicative price range for the Offer of $2.05 to $2.65 per share will give the company a market capitalisation of $305 - $372 million on listing.
The new primary capital of $75 million is being raised to enable the funding of Synlait Milk's growth initiatives. Proceeds will be applied to repay Synlait Milk's existing debt facilities which will be refinanced in conjunction with the IPO. Synlait Milk's growth initiatives include a new Lactoferrin extraction and purification plant, an onsite blending and consumer packaging plant, a 10,000 square metre dry store, testing laboratory, Anmix butter plant and a new spray dryer.
Synlait Milk managing director and co-founder John Penno says, "We are pleased with where the company has got to, and are ready to accelerate the development of our promising Infant Formula and Nutritional products business."
"Since 2010 the company has had the benefit of strong support from Bright Dairy and Food Co., Ltd (Bright Dairy) as a cornerstone shareholder. Bright Dairy is a long established company in China and has provided Synlait Milk with valuable strategic insights into that important market. Bright Dairy also became an early customer for our fully-formulated infant formula."
Bright Dairy has elected not to sell any of its shares into the offer and will retain its current shareholding. As a result Bright Dairy's percentage holding is expected to reduce post IPO from 51% currently to about 40%, dependent on the final price of the shares offered.
Bookbuild, pricing and allocation is expected to take place on July 8/9, 2013 and final price announcement on July 10, 2013. Opening date looks set for July 10, 2013 while closing date is expected to be 5pm on July 19, 2013.
The allotment date is July 23, 2013 and quotation and trading of shares is set to start on the NZX Main Board on July 23, 2013 and mailing of holding statements July 25, 2013.
These dates are indicative only and may change.
