Synlait Secures $218M Bailout, Setting Positive Future Amid Financial Struggles

At a special meeting, shareholders approved the injection of new capital, with Bright Dairy contributing $185 million by purchasing shares at 60 cents each, raising its ownership stake to over 65%. Meanwhile, a2 Milk will invest nearly $33 million at 43 cents per share, maintaining its 20% stake. This move alleviated fears of insolvency, which had been looming over the company.

Despite the dilution of smaller shareholders' stakes from 41% to 15%, the equity raise promises to increase the value of their holdings with the additional investment.

The equity raise remains contingent on the refinancing of Synlait’s bank facilities and the settlement with a2 Milk, with the company expecting these conditions to be finalized by Tuesday.

Chairman George Adams described the vote as a "watershed" moment, emphasizing that this investment will stabilize Synlait and strengthen its future for stakeholders, including employees, farmer suppliers, and customers.

In addition to the financial restructuring, Synlait has announced that it will cease milk processing at its Pōkeno plant, with Open Country stepping in to handle milk collection and processing from its Waikato suppliers. Pōkeno will focus on plant-based proteins, while the Dunsandel facility will remain the core of Synlait’s dairy operations.

The company's full-year financial results will be announced soon, offering more insight into its path forward.