NZ’s Synlait Milk to raise NZ$120m in IPO, share sell-down
Synlait Milk competes with Fonterra, the world’s largest dairy exporter, to produce New Zealand-made produce to feed growing middle class in emerging countries
New Zealand dairy company Synlait Milk plans to raise a total of NZ$120 million (HK$720.2 million) in an initial public offering and share sell-down, ending the majority stake held China’s Bright Dairy.
The milk powder processor owned by Shanghai-based Bright, Japan’s Mitsui and Synlait, a private local company, said it was seeking to raise NZ$75 million (HK$450.1 million) in fresh capital. Mitsui and Synlait Ltd will offer a further NZ$45 million (HK$270.1 million) to pay down debts and expand operations.
Bright, which has held a 51 per cent stake in the firm since 2010, will not take part in the sell down, Synlait Milk said in a statement. It added that a dilution in Bright’s shareholding would lower its stake to around 40 per cent of the company.
Synlait Milk competes with Fonterra, the world’s largest dairy exporter, to produce New Zealand-made milk powder to ship overseas for use in products ranging from milk formula to cheese to feed a growing middle class in emerging countries.
It is one of several small New Zealand companies operating in China’s US$12.4 billion (HK$96.2 billion) milk formula market which has grown 12-fold since 2002 as more mothers join the workforce and spend less time breastfeeding.
The company, which exports all of its product, has said it hopes China will eventually account for one-third of its overall revenue. New Zealand supplied 90 per cent of the nearly US$2 billion worth of milk powder China imported last year.
Synlait Milk set a price range for the offer of NZ$2.05-NZ$2.65 per share, giving the company a market capitalisation of NZ$305 million-NZ$372 million.
