Synlait extends $130m shareholder loan another year

Friday, 13 June 2025

Synlait’s biggest shareholder has created its path back to profitability and stability, Shareholders Association chief executive Oliver Mander says.

Synlait Milk has extended its $130 million shareholder loan from Bright Dairy for a further 12-month term, maturing July 12 next year.

The loan was initially for 12-months and included an option for the troubled dairy company to extend it by a further year. Bright Dairy is a Chinese company that owns 65.25% of Synlait.

Shareholders Association chief executive Oliver Mander said the loan extension was evidence that Bright Dairy continued to have faith in Synlait’s future.

Bright Dairy was “clearly committed to funding in whichever shape or form. That does reflect what they stated last year during the entire restructuring process, and also reflects their statements at shareholder meetings,” Mander said.

Synlait has since demonstrated that the support was a key factor in creating its path back to profitability and stability, he said.

Synlait hit trouble after a large pre-pandemic investment programme, which included spending $280m on a manufacturing plant at Pōkeno.

The company made a $4.8m profit after tax in half year to January 31, up 105%.

“From a shareholder perspective, securing that funding and ensuring that there's a glide path into a more effective debt structure. That seems like a reasonable thing.”

In June last year more than half of the farms supplying the company had sent “cessation notices” telling Synlait they did not intend to continue supplying their milk after their current contracts expired.

However, Synlait told the market in April that most cessation notices issued had been withdrawn.

Mander said farmers seemed to be a lot more confident in the future of the company.

Synlait chairperson George Adams speaking in July appealing to shareholders to approve a $130 million loan to stave off liquidation.

Farmers were also creditors and at risk if there was a breakdown of the company, he said.

Acting chief executive at the time, Tim Carter, said in April that higher-than-expected level of inquiries from new farmers wanting to supply Synlait, meant the company had sufficient milk volumes for the next two financial year.

Richard Wyeth took over the top job in May, having previously led Westland Milk Products and Taupo-based dairy company Miraka. He also helped establish Open Country Dairy.

Shareholders approved the Bright Dairy loan at a special shareholders’ meeting in June last year as part of the company’s broader balance sheet reset programme.

The programme also included an equity raising, and was supported by bank refinancing.

Synlait’s current one-year bank refinancing facilities are due for renewal on September 30, and the refinancing work was underway, the company said.

Synlait hit trouble after a large pre-pandemic investment programme, which included spending $280m on a manufacturing plant at Pōkeno, $125m on a new liquid plant at Dunsandel and $150m on cheese companies Talbot Forest Cheese and Dairyworks.

Its troubles have taken a heavy toll on the value of the company, with its shares having fallen from $3.66 in late 2022 to under 50 cents, but have recovered to about 70c on Friday.

The shares climbed on the company announcing a return to profitability for the first half year to end January and peaked at $1.02 in February on Wyeth’s appointment.