Synlait Milk Increases Milk Price Forecast Amid Capital Raise and Market Volatility

Retaining its milk supply remains a key focus for Synlait as it seeks to ensure its offering remains competitive to attract and retain farmer suppliers. The company has also enhanced its advanced rate profile for the upcoming season to strengthen its on-farm appeal.

Synlait's final milk price for the 2023/2024 season is set to be confirmed with its full-year financial results on September 30.

The price forecast adjustment comes as Synlait embarks on a crucial $217.8 million capital raise, set for a shareholders’ vote on September 18. The recapitalization plan will result in China’s Bright Dairy increasing its stake in the company from 39.01% to 65%, granting it a controlling interest. a2 Milk's shareholding will remain unchanged at 19.8%. The capital raise, which is three times Synlait's current market capitalization of $86 million, will primarily be used to address $180 million in retail bonds due in December.

This move follows Fonterra’s recent increase in its farmgate milk price forecast to $8.50 per kgMS for the 2024/2025 season, alongside strong full-year earnings expectations.