Tuesday 24th November 2009 |
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Synlait Milk Ltd’s intention to boost its equity through a sharemarket listing has been put on the back-burner after an unenthusiastic reception from investors.
The Canterbury-based milk powder and functional products manufacturer advised the market that it has deferred its plans to IPO following its pre-marketing programme to brokers and local and international investors.
Synlait was seeking up to $150 million to help fund the construction of a second processing plant alongside its present Dunsandel facility. It currently processes 70 million litres of milk a year according to its website.
The company said the level of support was insufficient to proceed with the IPO at this time; which may be a reflection of renewed competition for equity investment following a number of sharemarket listings such as Kathmandu in the past couple of months. BioVittoria and DNZ Property Group are others seeking inputs of outside capital.
“Synlait remains committed to executing its plans and will continue to consider a future IPO and the alternative proposals centred on private capital placements that have been negotiated in parallel,” the company said in a press release.
Present shareholders include Japan’s Mitsui and Co, which acquired a 14% stake in 2007 for $13.5 million, implying a capitalisation of $96 million. Mitsui also made a further $16.5 million loan available to Synlait at that time.
Businesswire.co.nz
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