New Zealanders may get another chance to invest in Canterbury dairy processor Synlait Milk, which has announced it will sell a majority stake to Chinese firm Bright Dairy & Food Co.
Synlait Milk aborted an attempt to raise $150 million through listing on the NZX last year after investor interest
proved tepid.
In a statement posted on the Shanghai Stock Exchange website, Bright Dairy said it had approved Synlait Milk's plans to have another attempt at listing within the next three to five years.
Bright Dairy would be entitled to subscribe for a "certain amount" of new shares in order to retain its 51 per cent stake in the Canterbury firm, the statement said.
Synlait Milk chief executive John Penno yesterday confirmed that another stock market listing was a possibility.
"It's one of the things that's definitely on the table and one of the things that we've talked to Bright about, but it will be some years away," Penno said.
He said it was too early to say what the capital gained from a successful listing would be used for, or which exchange Synlait Milk would list on.
Capital markets should be in a healthier state in three to five years' time, he added, giving the firm a better chance of success.
"It was a pretty tough time to be doing anything in the capital markets at that time [the last time Synlait Milk tried to float last year] and we were only two years old."
Bright Dairy, which is listed on the Shanghai stock exchange and is China's third largest dairy company, announced this week it would invest $82 million to buy a 51 per cent stake in Synlait Milk, subject to regulatory and shareholder approval.
The Chinese firm's investment will allow Synlait Milk to build a second processing plant at its site in Dunsandel, near Christchurch, which will produce high-value infant formula.
Infant formula produced at the site will be co-branded for export to China, where there is a high demand for such products made in New Zealand.
Federated Farmers responded to news of the deal scornfully, saying it was a shameful indictment of New Zealand's capital markets that the investment had to come from overseas.
Bright Dairy will hold a shareholders' meeting next month to discuss the Synlait Milk deal, which is subject to the approval of New Zealand's Overseas Investment Office (OIO).
Natural Dairy (NZ) Holdings, a Hong Kong listed company, is also awaiting OIO approval to buy the North Island's 16 Crafar farms.
The Synlait milk processing factory near Dunsandel in Canterbury. Photo / Simon Baker
New Zealanders may get another chance to invest in Canterbury dairy processor Synlait Milk, which has announced it will sell a majority stake to Chinese firm Bright Dairy & Food Co.
Synlait Milk aborted an attempt to raise $150 million through listing on the NZX last year after investor interest
AdvertisementAdvertise with NZME.