The NZX is allowing Chinese dairy player Bright Dairy to keep control of Canterbury milk company Synlait’s board despite a dilution in its stake from a $120 million public offering of shares.
The exchange said today it was granting Canterbury dairy processor and exporter Synlait Milk a waiver from a listing rule and that will permit Bright Dairy to continue to appoint four of eight directors even though its shareholding will dilute to between 38 per cent and 41 per cent with the $120m offer of shares to the public.
Bright Dairy holds 51 per cent now, after it pumped $82m into Synlait Milk in late 2010.
It is not buying any new shares in the share offer to keep its holding at 51 per cent.
Synlait Milk told the NZX that Bright Dairy would not support the share offer unless it could continue to consolidate Synlait Milk into its accounts under China’s accounting rules and to do that it had to have control of Synlait Milk’s board.
NZX has agreed on the conditions the »special» governance arrangements are contained in Synlait Milk’s Constitution and are fully disclosed in the offer documents and every annual report during which the arrangements apply, and that Bright Dairy holds no less than 37 per cent of Synlait Milk.
The NZX has also granted Synlait Milk a waiver allowing the Bright Dairy-appointed directors who cannot attend a meeting to appoint another Bright dairy director to exercise their voting right.
Synlait Milk announced its offer this morning.
The company is raising $75m from the issue of new shares and would offer also up to $45m of shares from existing shareholders selling all of part of their shareholdings.
Synlait said an indicative share price would be $2.05 to $2.65 for the shares.
That would give the company a market value of between $305m and $372m.
Synlait Milk was expected to list on the NZX’s main board on July 23.
The $75m new capital would be used for growth initiatives.
Source: Stuff
