Synlait on track to complete refinancing, reports four-month loss
Synlait Milk says it is in talks with existing and new lenders about the refinancing of its senior syndicated bank facilities, which mature at the end of this month.
In an update, Synlait also provided preliminary financial information for the January 1 to April 30 period, which showed a net loss of $12 million.
As previously disclosed in its half-year result, Synlait said it had faced a number of headwinds outside of its control.
The company said the negative financial impact related to the month of January.
“Synlait remains focused on progressing operational improvements and balance-sheet strengthening following the North Island asset sale,” it said.
The reported result included a preliminary gain arising from the sale of Synlait’s North Island assets, which was successfully completed during the period.
The dairy and infant formula manufacturer said it was on track to complete its refinancing on June 30, with progress continuing towards securing the required support and approvals under the facilities.
One of the requirements of the new senior facilities’ lenders was that the $130m shareholder loan that Bright Dairy International Investment provided to Synlait in July 2024 be replaced with a new loan.
The company, which went through a major recapitalisation in 2024, is primarily owned by China’s Bright Dairy (65.25%) and its biggest customer, infant formula company a2 Milk (19.8%).
In its first-half result, released in March, Synlait said Bright had preliminarily indicated its future shareholder support, subject to relevant approvals.
Synlait, through an independent directors’ committee (IDC), has been negotiating the terms of a replacement Bright loan with Bright Dairy International Investment.
“Bright has now approved its entry into the replacement Bright loan and announced its intention to make the loan through the Shanghai Stock Exchange,” Synlait said.
Synlait said it expects to enter into the replacement Bright loan once the final documentation was approved by Synlait’s lending group and the IDC.
Shares in Synlait gained 1.5c or 3.6% to 43c after the announcement.
In March, Synlait reported a bigger-than-expected net loss after tax of $80.6m with an underlying net loss after tax of $27.3m.
The company has not provided guidance for its current financial year, which finishes on July 31.
In May, Synlait surprised the market by announcing the resignation of chief executive Richard Wyeth after just a year in the job.
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