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Synlait Shareholders Approve $130M from Bright Dairy Amid Financial Strain

Australia 11.07.2024
Source: The DairyNews
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Synlait Milk’s shareholders have overwhelmingly approved a significant $130 million loan fr om Bright Dairy, its largest shareholder, to stave off financial difficulties. The vote saw 99.59% in favor of the loan, with only 0.41% against it, in a crucial ballot wh ere Bright Dairy, holding a 39% stake in Synlait, was not permitted to vote. The turnout represented 48% of Synlait's total issued capital.
Synlait Shareholders Approve $130M from Bright Dairy Amid Financial Strain
The New Zealand-based milk processor will utilize the funds to fulfill an imminent $130 million obligation to its banks due by July 15. The company’s board had previously warned that failure to meet this obligation could potentially force Synlait into halting operations or declaring insolvency if no alternative arrangements were made.

Further complicating matters, Synlait was engaged in critical discussions with a2 Milk Company, its second-largest shareholder, which holds a 19% stake. This morning, a2 Milk Company announced on the New Zealand Stock Exchange that it would support the resolution, despite expressing ongoing concerns about Synlait’s financial health and its broader recapitalization strategy. This strategy includes the discussed shareholder loan, proposed equity raising, and refinancing of bank facilities, among other issues.

Synlait’s Chair, George Adams, expressed gratitude for the shareholders' support, acknowledging the loan as a pivotal first step towards rebalancing the company’s finances. “We are focused on advancing our core Advanced Nutrition and Foodservice businesses, recognizing their significant growth potential," Adams commented.

Julia Zhu, representing Bright Dairy's directors on the Synlait board, also recognized the shareholder vote as an endorsement of the board's efforts to revitalize the company’s financial standing. “Bright Dairy remains fully committed to ensuring Synlait's prosperity for the benefit of all stakeholders,” Zhu stated.
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