Shareholders vote to accept $130m loan, use it to repay banks.
Synlait shareholders have voted 99.6% in favour of using a $130 million loan from major shareholder Bright Dairy to repay bank loans due next week.
Those against amounted to 0.4% of the votes cast before and during a special shareholders’ meeting.
Total votes cast were 105 million shares or 48% of the issued capital.
Bright Dairy, as an interested party to the loan proposal, could not vote its 39% shareholding.
Another major shareholder, a2 Milk, said earlier in the day it would vote its 20% in favour of the loan proceeding.
Synlait now moves on to a wide-reaching recapitalisation process, to which Bright has already committed.
Shareholders will be advised of the equity raise details in early August, chair George Adams said.
Another special shareholders’ meeting will be required to vote on the proposed equity raise.
The proceeds will be used for deleveraging, including repayment of $180m of retail bonds.
“Once debt returns to a sustainable level, Synlait can focus on lifting performance and profitability.”
Adams said the areas of focus for the board include the North Island strategic review, retaining farmers-suppliers, and sustainable earnings growth in FY25 and beyond.
Before the special meeting Synlait reported that it held proxies for 104 million votes, 57% for the loan motion, 0.2% against and 43% left open to the holder of the proxy.
The NZX regulatory authority placed a trading halt at 1.30pm until after the results of the meeting were known at around 3.30pm.
At the beginning of the day Synlait announced that cornerstone shareholder and major client a2 Milk would vote its 20% shareholding in favour of the loan approval.
A2 Milk said it was in ongoing discussions with Synlait on the broader recapitalisation plans.
In share trading following the a2 Milk vote announcement the share price rose 44% to 37.5c. However, that price is 75% below the $2 level 12 months ago.
Newly confirmed Bright director Julia Zhu acknowledged the shareholder vote in support of the board’s turnaround actions underway to restrengthen Synlait’s financial position.
“There is a stronger, healthier future for the business coming and Bright Dairy is deeply committed to ensuring the Synlait’s long-term success for all shareholders and its farmer suppliers.”
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