New Zealand dairy ingredients and infant formula firm Synlait Milk has outlined plans for its IPO – and how it intends to spend the proceeds from the listing.
Synlait Milk has said the IPO on the New Zealand stock market should raise NZ$75m in new capital to help reduce debt and press on with projects. Shares are expected to start trading next month.
“This offer will raise $75m in new capital which will be applied to retire debt and will allow us to access further debt ?nance, to be used to support the construction of a new lactoferrin extraction and puri?cation facility, an on-site blending and consumer packaging plant, a new dry store, a quality testing laboratory, a butter plant, and the largest project, a new spray dryer,” Synlait Milk chairman Graeme Milne said.
Last month, Synlait Milk said it would invest to improve its production of lactoferrin. The move follows contract wins with YinQiao Xi’An, the largest dairy manufacturer in north western China, Bright Food and New Zealand milk firm A2 Corp. Demand for lactoferrin is being driven by the rapid expansion of the Chinese infant formula market, the group said at the time.
Synlait Milk said its shares would be priced at NZ$2.05-2.65. Bright Dairy, the Chinese group, owns 51% of Synlait Milk and will continue to hold an investment in the business. However, its stake could reduce to 40.7% after the IPO.
Synlait Ltd, a private New Zealand company part-owned by Japan’s Mitsui, holds the other 49% of Synlait Milk.
Prior to the IPO, Synlait Ltd said it would distribute its shares in Synlait Milk to its shareholders. Synlait Milk plans to offer existing Synlait Ltd investors the opportunity to sell any of their shares in the dairy firm. Mitsui will still hold a stake in the business after the IPO, Synlait Milk said.
