Synlait Milk Secures NZ$450 Million Refinancing for Turnaround Strategy
Synlait Milk Limited has successfully completed the documentation for a major bank refinancing and shareholder loan package, injecting NZ$450 million into the company. This financial restructuring supports the dairy processor's turnaround strategy, which is focused on stabilizing, simplifying, and scaling operations.
The refinancing package includes NZ$320 million in new commercial bank facilities, alongside a NZ$130 million replacement shareholder loan from Bright Dairy International Investment Limited. This new financial arrangement is supported by a nine-member international banking syndicate, which includes major institutions such as ANZ Bank, China Construction Bank, Bank of China, and HSBC.
The structure of this debt is diversified into five facility categories, including a NZ$15 million secured overdraft, NZ$146 million in seasonal working capital, and NZ$119 million in term facilities. The debt package also features dual-currency options in New Zealand dollars and Chinese yuan, with a deleveraging schedule to reduce commitments to NZ$200 million by June 1, 2027.
Synlait is required to adhere to new financial covenants, including a net senior leverage ratio of 3.0x, a working capital ratio increasing from 1.50x to 1.75x by February 2027, and an interest cover ratio advancing to 3.0x. Additionally, shareholders’ funds must always exceed NZ$450 million.
The NZ$130 million shareholder loan replaces an existing loan from Bright Dairy, ensuring alignment with Synlait’s capital recovery plans. This transaction was managed by an independent directors’ committee, which excluded Bright-nominated board members.
In a strategic move to align its operations with Bright Dairy, Synlait's board has decided to change its financial reporting date from July 31 to December 31. This change will take effect after a five-month transitional period in 2026, allowing for synchronized reporting with its parent company.
