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Synlait Milk Limited (NZX: SML) announces $200 million equity raising

Tuesday 10th November 2020

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Synlait Milk Limited (“Synlait” or the "Company”) (SML.NZX/SM1.ASX) today announced an equity raising (“Equity Raising”) via an approximately $180 million underwritten placement at a fixed price of NZ$5.10 per share (“Placement”) and a $20 million underwritten share purchase plan (“Share Purchase Plan” or “SPP”).

Proceeds from the Equity Raising will support Synlait to:

 

• Complete the investment phase of its strategy including the customisation of Synlait Pokeno and Auckland for processing and packaging equipment to service its new multinational customer.

 

• Strengthen its balance sheet to:

 

• provide more financial headroom as it navigates COVID-19, which is having an unpredictable impact on the stability of its current and future earnings; and

 

• create capacity to deliver on its purpose: Doing Milk Differently For A Healthier World.

 

FY21 Guidance Update

 

• Synlait now expects consumer-packaged infant formula volumes to be lower than FY20, with softer demand in HY21 than previously expected as our key customer resets its own inventory levels.

 

• Synlait still expects volumes to increase in the second half of FY21 once stocks have cleared, however we are expecting our HY21 NPAT result to be significantly lower than HY20.

 

• Against this, we now expect to be at or slightly below the FY20 NPAT result for FY21 as Synlait continues to focus on optimising its assets and manufacturing efficiencies.

 

• This guidance is subject to the unpredictable effects of COVID-19, with consumer behaviour, channel dynamics and supply chain disruptions all subject to change. further update will be provided at Synlait’s half year result in March 2021.

 

• A further update will be provided at Synlait’s half year result in March 2021.

 

See the links below for more details:

Source: Synlait Milk Limited



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