Synlait Milk | Synlait Milk shares pop, readies raising

Dairy processor Synlait Milk cut trading in its shares short on Monday ahead of a capital raising.

Published by: Damián Morais
The Australian Financial Review
Sarah Thompson, Anthony Macdonald and Tim Boyd

With its ASX-listed stock up 8.6 per cent to $5.54, Synlait called time on trading to allow it to prepare a capital raising which it said would be ready by the time the market opened on Tuesday.

The mooted raising comes only six weeks after Synlait told shareholders it was reviewing capital management options, and only a few days after flagging a $NZ70 million capital expenditure bill.

“While our business plan for the year ahead is fully funded, in the current COVID-19 environment we recognise the need to assess our balance sheet and capital management options, while we focus on cash management and strong maintenance capex governance,” Synlait said on handing down its results for the year to July 31.

The $NZ70 million capex requirement was revealed last week, when the company announced it had signed a new supply agreement to manufacture, blend and package nutritional products for Asian markets.

Synlait said it would need to spend $NZ70 million upgrading its Synlait Pokeno and Synlait Auckland sites.

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