Synlait CEO Resignation Highlights Deeper Challenges Facing Dairy Processor
A revolving door of chief executives at milk processor Synlait is a warning sign, says Lincon University senior lecturer in agribusiness Nic Lees.
New Zealand Stock Exchange’s regulatory arm, NZ RegCo and the Takeovers Panel have confirmed that no further action is being taken in relation to the complaint received regarding the special shareholders’ meeting.
The notice of complaint asserted that under the NZX listing rules and takeovers code, Synlait’s two biggest shareholders Bright Dairy of China and a2 Milk Company (a2MC) should not be able to vote on resolutions relating to the recapitalisation, leaving only shareholders other than Bright and a2MC being able to vote on the two resolutions.
The complaint also claimed that that Bright Dairy and a2MC are associated persons under the rules on the basis that they are acting jointly or in concert.
NZRegCo ruled that it’s been informed by Synlait, and it has also been confirmed by a2MC and Bright Dairy, that the Bright placement and a2MC placement were negotiated entirely separately such that there were no tri-partite negotiations, each pursuing different commercial objectives as ultimately evidenced by the terms of the placements.
“It has been further confirmed by Bright Dairy and a2MC that they have not negotiated the Bright placement and a2MC placement as between themselves,” NZRegCo says.
The Takeovers Panel has issued a media release stating that it has declined to call a section 32 meeting under the Takeovers Act 1993 and, based on the information before it, will not take any further action in relation to this matter at this stage.
Synlait says the special shareholders’ meeting will proceed as scheduled on Wednesday 18 September 2024 at 9am to vote on the recapitalisation plan.
The plan, which will see the company’s two biggest shareholders Bright Dairy and a2 Milk inject cash into the the debt-laden dairy and infant formula maker, will go before a special meeting scheduled for September 18.
Under the plan, a2 Milk will end up retaining its current shareholding (19.8%), while Bright Dairy’s ownership will increase from 39% to 65.25%
The two companies will control around 85% of Synlait’s voting capital, with retail shareholders’ share declining from around 41% to 15%.
Penno is a 2.3% shareholder, having previously served as the chief executive, the non-independent chair, and as a director of the company until May this year.
