Synlait shares take a hammering
Troubled milk processor Synlait's share price is taking a hammering as nervous investors offload their stakes.
The company's shares, launched at $2.20, were hovering around $2.78 after five hours of trading.
The debut on NZX completes Synlait Milk's successful Initial Public Offering (IPO), with gross proceeds of $114 million received from new shareholders at $2.20 per share.
Synlait Milk chairman Graeme Milne says the IPO has been an outstanding success.
"Synlait Milk has raised $75 million of new capital which will be applied to pay down debt and access funding for growth initiatives that will increase the capacity of the existing plant by 50% and lift production of high value ingredients and infant formula."
"Of further significance is the addition of 2,296 new shareholders to support Synlait Milk's growth. This includes FrieslandCampina Investments Holding B.V., which is a subsidiary of Royal FrieslandCampina of Holland, one of the world's largest dairy cooperatives and an existing customer of Synlait Milk. Also, the IPO attracted strong support from institutions in New Zealand, Australia, Singapore and Hong Kong, employees and suppliers of Synlait Milk and New Zealand retail investors."
Bright Dairy will remain Synlait Milk's cornerstone shareholder with a 39.1% holding. Mitsui & Co., Limited and Mitsui & Co. (Australia) Limited will together hold approximately 8.4% and FrieslandCampina Investments Holding B.V. will hold 7.5%.
Managing director and co-founder of Synlait Milk John Penno says it is clear that many investors see Synlait Milk as a strategic asset in the New Zealand dairy industry and an opportunity to invest in a business that is clearly committed to creating more value from milk.
"Synlait Milk has performed. It has met its milestones and we are fully confident that as a trusted supplier of ingredients to some of the world's leading milk-based health and nutritional brands Synlait Milk is on track to deliver value for all stakeholders now and into the future.
"Following our successful IPO we will now undertake a series of growth initiatives that will take Synlait Milk on the next stage of its journey. We will seek to fulfil our potential by continuing to focus on the requirements of our customers and delivering excellence at every step in the process."
