Latest / Best of Business / Rowena Duncum: The Country producer on Synlait asking shareholders for multi-million dollar lifeline

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Rowena Duncum: The Country producer on Synlait asking shareholders for multi-million dollar lifeline · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed B.
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  Speaker 2: Now. Struggling dairy company Sinlay has asked the shareholders to
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  Speaker 2: vote in favor of a one hundred and thirty million
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  Speaker 2: dollar loan from its biggest shareholder, which is Chinese Bright Dairy.
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  Speaker 2: Sinlay says without the loan, it will need to cease
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  Speaker 2: trading or it will need to initiate insolvency procedure proceedings
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  Speaker 2: in Rouwenda Duncan from the Country is filling in for
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  Speaker 2: Jamie mackay with us. Now, hey Roe, hey hev sounds
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  Speaker 2: like a really serious situation. What alternatives do they have?
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  Speaker 3: Yeah, well, not many. So it's been brewing for a
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  Speaker 3: week while. So back in April, Sinlay announced there that
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  Speaker 3: I had made a ninety six million dollar first half loss.
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  Speaker 3: Now this was compared to an eight point four million
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  Speaker 3: dollar profit twelve months ago. So that was for the
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  Speaker 3: six months that ended in January. So that was when
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  Speaker 3: they won that extension because the one hundred and thirty
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  Speaker 3: million dollar debt repayment was due at that time, so
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  Speaker 3: they extended it through until the fifteenth of July. Now
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  Speaker 3: between now and then, they announced their upcoming forecast for
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  Speaker 3: the current season and they matched it to Fonterra, so
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  Speaker 3: basically sitting on an eight dollar payout. Remember King's Birthday. Monday,
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  Speaker 3: they made an announcement on the Australian Stock Exchange because
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  Speaker 3: obviously the New Zealand market was closed for the public holiday,
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  Speaker 3: and that's when they explained that their financial woes had worsened.
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  Speaker 3: More than half of their suppliers had indicated they wanted
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  Speaker 3: to leave Sinlace. Of course that was when they said, right,
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  Speaker 3: I want to stop supplying my milk. They have to
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  Speaker 3: wait two years, so there's like a two year holding
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  Speaker 3: period before they can do that. And then, of course
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  Speaker 3: Bright Dairy is one of its largest shareholders. There's an
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  Speaker 3: associated company from Bright Dairy who have put forward this
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  Speaker 3: one hundred and thirty million dollar lifeline. So this debt
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  Speaker 3: has to be paid on the fifteenth of July, so
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  Speaker 3: shareholders will now vote for it at a special general
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  Speaker 3: meeting which has been shareduled four days before the loans
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  Speaker 3: due on July eleven. Look, they've had their dairy works
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  Speaker 3: up for sale, they haven't had any buyers of that.
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  Speaker 3: Their share prices mount seventy one percent in the last
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  Speaker 3: twelve months. This is probably as dire as it's going
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  Speaker 3: to get. Heather Obviously, they've had changes at the top
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  Speaker 3: as well, with a new chair coming on board this year.
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  Speaker 3: It's just it's a real challenging time for them. And yeah,
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  Speaker 3: I know a lot of sin Lay suppliers are very
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  Speaker 3: worried about what laves are heed.
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  Speaker 2: Yeah too, right, ro thank you for filling us and
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  Speaker 2: really appreciate Rowena Duncan, who is from the country. Sounds
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  Speaker 2: like it comes down to a two and whether a
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  Speaker 2: two goes ahead is a very influential shareholder. Whether it
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  Speaker 2: goes ahead with it is the question.
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