Frequently Asked Questions (FAQs)
What is happening?
Synlait completed an equity raising on 1 October 2024 as part of a wider plan to strengthen Synlait’s balance sheet and prioritise returning to a strong free cash flow position and, in time, sustainable profitability and growth. The first phase of that plan was implemented, with the drawing of the $130 million shareholder loan made available to Synlait by Bright Dairy International Investment Limited, a related company of Bright Dairy Holding Limited, Synlait’s 39.01% shareholder, to meet the payment to Synlait’s banks on 15 July 2024. This transaction was approved by shareholders at Synlait’s special shareholders' meeting on 11 July 2024.
The equity raising occurred concurrently with the refinancing of Synlait’s existing bank facilities and the settlement with The a2 Milk Company and A2 Infant Nutrition Limited with respect to various disputes that Synlait has been involved in with its major customer and second largest shareholder.
The further financial support, in the form of approximately $217.8 million of new equity capital at a premium to Synlait's current share price, has come from Bright Dairy Holding Limited and The a2 Milk Company, Synlait's two major shareholders, who together hold around 60% of Synlait's shares (and, following completion of the equity raise, together hold around 85% of Synlait’s shares).
The change in Bright Dairy Holding Limited’s shareholding that occurred on completion constituted a change of control event in relation to the SML010 bonds, and holders now have the right to redeem their bonds early before the maturity date on 17 December 2024.
What is a change of control event?
A change of control event will occur if any circumstance or event arises which results in a person (together with its associates) holding or controlling more than 50% of the voting rights of Synlait. This occurred at the time of completion of the placement to Bright Dairy Holding Limited. Under the bond documents, if a change of control event occurs, bondholders may choose to redeem their bonds before the maturity date.
How do I redeem my bonds?
On 1 October 2024, bondholders were sent information advising how to elect to redeem the bonds early via this website. Bondholders will have up to 5.00pm on 15 October 2024 to submit their election.
If I elect to redeem my bonds early, what amount will I receive?
The redemption price is $1.00 per bond (plus accrued interest).
If I elect to redeem my bonds early, when will I receive payment?
Payment is expected to be made to the bondholder’s bank account held by Synlait’s registrar Computershare on 13 November 2024.
What happens if I do nothing?
If bondholders choose not to elect to redeem their bonds early, they will continue to hold their bonds until the maturity date of 17 December 2024.
Can I still trade my bonds?
SML010 bonds are currently under a trading suspension.
Bondholders that elect to redeem their bonds will no longer be able to trade their bonds.
Bondholders that do not elect to redeem their bonds will be able to trade once the trading suspension is lifted on 16 October 2024. Bondholders should note that the reduced number of outstanding bonds on issue may impact trading of the remaining bonds during that period.
Will I receive more or less if I wait until the bonds are redeemed on maturity on 17 December 2024?
Please contact a financial advisor or share broker and they can advise you.
What should I do?
Please contact a financial advisor or share broker and they can advise you