Synlait

Struggling Dairy Giant Synlait Faces Financial Woes and Asset Sales

Synlait, the dairy company, is battling for survival amidst a $96 million loss and debt repayment struggles. Find out more about its challenging situation!

Synlait, the New Zealand dairy company, is currently in dire financial straits, having incurred a staggering $96 million loss in the first half of the year. The company recently missed a crucial debt repayment deadline but managed to secure an extension until July 15th. To alleviate its financial burden, Synlait is considering deleveraging options, such as selling off assets like the Pokeno processing plant and Auckland blending and canning plant, along with a possible discounted sale of its subsidiary, Dairyworks.

In a bid to survive, Synlait received a lifeline from its bankers and major shareholder, Bright Dairy from China, who are aiding the company in navigating its financial challenges. The company is racing against time to raise capital and sell assets to repay its lenders, with around $120 million due and a three-month extension granted for the payment.

Amidst the turmoil, Synlait faces the harsh reality of needing major asset sales and significant new equity to stay afloat, as highlighted by dairy expert Keith Woodford. The pressure is further compounded by a growing number of dairy farmers discontinuing their supply to Synlait due to the company's financial uncertainties.

As Synlait grapples with its financial woes, it is compelled to undertake a strategic review of its North Island assets, including the potential sale of a milk plant and canning facility. The future of the dairy giant hangs in the balance as it navigates through this turbulent period, seeking ways to stabilize its financial standing and ensure its sustainability in the industry.

In a surprising turn of events, Synlait has managed to secure a lifeline from its lenders and major shareholder, Bright Dairy, showing signs of potential recovery. The company's resilience in the face of adversity and its strategic moves to raise capital and streamline operations reflect a determined effort towards financial stability and growth in the challenging dairy market.